War Damages to Property: Claiming Compensation

War Damage in Israel: Understanding Your Rights

War damage is not uncommon in Israel. 2023 showed devastating potential. Property and business damages are substantial. Many ignore their entitlements. They don’t know who pays compensation.

Compensation for War Damage: Minimizing Losses

This article outlines basic definitions and rights. It helps minimize losses. How to get compensation for vehicles? For property or other assets? Is court action needed? How does this affect real estate? This article answers these questions.

What Constitutes War Damage?

War damage is defined as damage to an “asset” resulting from: (Section 35 of the Property Tax and Compensation Fund Law, 1961)

1. Military actions by the enemy’s regular armies; or-
2. Other hostile actions against the State of Israel; or-
3. Military actions undertaken by the Israel Defense Forces.

War Damage Compensation: Defining “Asset”

What constitutes an “asset”? For compensation, it includes land. Agricultural land and crops are included. Buildings and structures under construction qualify. Orchards, inventory, and equipment count. Vessels and aircraft registered in Israel are assets.

Indirect Damage: Frontier Settlements

The law recognizes “indirect damage.” But only in “frontier settlements.” These are designated by the Minister of Finance. Specific compensation provisions apply there.

Does All War Damage Qualify for Compensation?

War Damage Compensation: Defining “Actual Damage”

The law allows claims for “actual damage.” Section 1 defines this amount. It’s the lesser of two options.

Calculating Actual Damage

First, value difference before and after damage. Second, total repair costs.

Indirect Damage: Frontier Settlements Only

For indirect damage, profit loss is included. This applies only to frontier settlements. Claimant could not prevent the loss.

Mitigation Expenses: Part of Actual Damage

Add mitigation expenditures to “actual damage.” These are reasonable expenses. They reduce the damage extent.

Who Pays Compensation for War Damage?

Israeli law mandates that the State maintain a dedicated fund for the payment of war damage compensation. This fund is financed from an unexpected source – real estate transactions. To clarify:

Unless exempt, purchasing or owning land involves tax payments: buyers pay purchase tax, and landowners pay property tax. A percentage of these taxes is annually allocated to a special fund called the “Compensation Fund.” As of 2023, 25% of property tax and 15% of purchase tax is allocated to the Compensation Fund. (Section 2A of the Property Tax and Compensation Fund Law, 1961).

In cases of war damage to property, real estate, agricultural produce, employers (due to salary payments), etc., the tax authorities will pay compensation from the Compensation Fund.

Property Tax Rejected a Compensation Claim – Can I Appeal?

Individuals who believe they have been unfairly treated by a Property Tax decision may file an appeal with the Property Tax Appeals Committee within 30 days of receiving the decision.

If a legal issue arises in the committee’s decision, an appeal can be filed with the District Court in the relevant jurisdiction within 30 days of receiving the committee’s decision.

What is the Amount of Compensation for War Damage?

The law distinguishes between two types of assets: (Section 1 of the Annex to the Property Tax and Compensation Fund (Payment of Compensation) (War Damage and Indirect Damage) Regulations, 1973).

1. Aircraft (compensation of 50% of the asset’s value);
2. All other assets (compensation of 100% of the asset’s value).

According to the regulations, the “asset’s value” is the amount that would have been received for the asset in a free market sale on the day the damage occurred.

In the case of war damage to a residential dwelling rendering it uninhabitable, the tax authority may also grant entitlement to alternative housing or fund alternative housing.

A Rocket Hit My Car, Am I Entitled to Compensation?

According to the law, notification of the damage must be submitted to the Property Tax authorities within two weeks of the incident, and a compensation claim must be filed within one month of the incident. (Section 5 of the Property Tax and Compensation Fund (Payment of Compensation) (War Damage and Indirect Damage) Regulations, 1973).

In the case of vehicle damage, a police report signed by a police officer is required. Prior approval from the Property Tax authorities must be obtained before vehicle repairs are undertaken. If professional assessment of the damage is required, the Property Tax authorities will send an appraiser.

To file an online claim for property damage compensation on the Property Tax website, click here.

A Rocket Hit My House, How Can I Receive Compensation?

The law requires notification to the Property Tax authorities within two weeks of the incident; and a claim can be filed within one month. However, in the case of a residential dwelling, prompt action is advised. Since damage assessment requires several professionals, notification to the Property Tax authorities should be made as soon as possible, ideally shortly after the incident.

If professional assessment is required, the Property Tax authorities will send representatives after receiving notification. “Professional” refers to an engineer or appraiser.

Regarding compensation from the insurance company (structure or contents), check your policy terms. War damage and acts of hostility are typically excluded from building or property insurance policies. However, Property Tax usually provides insurance coverage for household contents up to a certain limit that varies from time to time.