Last week the Greek Orthodox Patriarchate of Jerusalem woke up to find that every single one of its bank accounts had been frozen by the Municipality of Jerusalem. The Patriarchate runs churches, pilgrim sites, schools, hospices, and other charitable institutions but suddenly found itself unable to buy even a cup of coffee, let alone pay clergy stipends and workers’ salaries or settle bills. This drastic measure from city authorities is the latest in the dispute over the arnona property tax — a municipal levy that has never before been applied to properties used for religious or charitable purposes in Jerusalem.
The Patriarchate is no stranger to paying property taxes: it is one of the biggest landowners in the Holy Land — even Israel’s parliament, the Knesset itself, sits on land that belongs to this diocese that claims its foundation from the Apostle James. But the complex situation of the numerous church bodies in Jerusalem has long been subject to an important understanding between them and the State of Israel: Church-owned properties would be taxed when they are used for commercial, non-religious, or non-social functions, but the places of worship and charitable or educational properties are exempt from arnona.
The controversy first flared in 2018, when then-mayor Nir Barkat claimed that the Christian churches of Jerusalem owed over £131 million in property taxes for properties that had always been understood as exempt. In response, the Catholic, Orthodox, and Armenian churches united to close the Church of the Holy Sepulchre indefinitely, forcing a temporary climb-down by the city authorities.
No such tax has ever been levied on properties dedicated to religious or charitable use
Under Israeli law, municipalities can freeze bank accounts instantly, without requiring a court order or reference to national or banking authorities. Yet in all the centuries of Ottoman, British, Jordanian, and Israeli administration, no such tax has ever been levied on properties dedicated to religious or charitable use. The churches maintain that, as religious bodies sustaining schools, hospitals, welfare programmes, and other charitable works, they perform a vital role in the life of the city. If anything, they argue, these works should be supported rather than burdened with unprecedented financial demands.
The reach of the dispute extends beyond Jerusalem: Municipalities in Tel Aviv, Nazareth, and Ramle have also attempted to expand the arnona to properties historically exempt from it. While Prime Minister Benjamin Netanyahu’s office has pressed local authorities to back away from the churches, the municipalities insist the responsibility lies entirely within their jurisdiction and is neither a national nor international matter. Despite this, Israel’s handling of this case has now been handed to the Ministry of Foreign Affairs, but both the Greek Orthodox Patriarchate and foreign diplomats report the MFA has been sluggish in acting to persuade the city to reverse course.
So far, none of the other churches has had its accounts frozen but the pressure is mounting. The Armenian Patriarchate received a tax demand that the bishop in charge of finances was surprised to see included properties neither owned by the Armenian church nor connected to it. Their legal challenge to the city’s attempted foreclosures, originally set to be heard in February, has been postponed until September. The Franciscans, custodians of the Holy Land’s Catholic sites since the fourteenth century, are under similar pressure, adding to the many headaches the newly installed custos Fr Francesco Ielpo OFM will have to face.
Last year, the heads of the churches wrote to Netanyahu offering dialogue to seek a solution. In a July 2024 meeting with Jerusalem’s mayor, Moshe Leon, they explained and reiterated their position and the Mayor provided them with an assurance the municipality would not act unilaterally. Yet on 6 August 2025, the Patriarchate’s accounts were frozen.
This dispute is not merely local in character. Jerusalem is sacred to three world religions, and its Christian presence has long been safeguarded by complex international arrangements. The Status Quo agreements, formulated to halt disputes between the Christian communities as well as elaborate their relationship with the Ottoman state, were codified by firmans of 1852 and 1853 and reaffirmed by the European powers at Paris in 1856 and Berlin in 1878. The British Mandatory powers likewise honoured these agreements.
France, though a secular republic, nonetheless has very specific rights in the Holy Land, including extraterritorial authority over four sites in Jerusalem. When President Jacques Chirac visited in 1996, he refused to enter the French-controlled Church of St Anne until the accompanying Israeli soldiers withdrew in recognition of its status. The Fischer–Chauvel exchange of letters between France and Israel in 1948–49 made recognition of the new state conditional upon respect for French rights over its sites and Catholic institutions in the Holy Land.
Today, the Saint-Louis French Hospital, run by the Sisters of St Joseph, continues its vital work providing palliative care for the elderly and infirm. Just a stone’s throw from the municipality’s headquarters at Safra Square, it too has been targeted with tax demands.
At the moment, this immediate stage of the crisis could be ended instantly by a single action from the Mayor of Jerusalem, unfreezing the Patriarchate’s accounts and allowing it to resume its religious and charitable mission. The larger issue — the unilateral imposition of arnona on properties that have always been exempt — remains unresolved. The heads of the churches of Jerusalem are united in their opposition to this break with precedent, yet still declare themselves willing to find a negotiated solution. At a time when Israel’s international standing is under unprecedented strain, the influence of its national elected politicians, as well as influence from foreign interlocutors, may prove decisive.
