Tax benefits for border communities are not a favor
A family that chooses to build its home in a community near the border receives more than just an open view and lower rent. It also faces distance from medical services, sparse public transport, fewer education and leisure options, and a security threat that becomes part of the daily routine.
At the beginning of last June, the Knesset plenum approved in the second and third readings tax benefits for 58 communities in Judea and Samaria (a list that has since expanded to 64 communities in the final list published by the Tax Authority). The law caused a political storm in the Finance Committee after the heads of the confrontation line communities in the north claimed they were promised a parallel 4% increase in their tax credit in the same legislative move — a promise that was ultimately not fulfilled, while the move for Judea and Samaria was promoted.
But the political debate between the border regions misses the real challenge that all frontier families face, regardless of the specific border they live on. A family that chooses to build its home in a community near the border receives more than just an open view and lower rent. It also faces distance from medical services, sparse or sometimes non-existent public transport, fewer education and leisure options, and a security threat that becomes part of the daily routine.
The tax benefits given to these communities are not a gift. They are the state's way of bearing part of the cost. The cost starts with the most daily things: a pediatrician and basic medical services are not always available nearby, and any complex illness requires frequent trips to the big city. A private vehicle is also not a luxury. A young person moving to a border community may save on rent, but they will pay for that saving by purchasing a vehicle, fuel, and spending long hours on the road. The gap continues in the fields of education, culture, and welfare. Children travel long distances to school, and then are required to travel again to participate in a club or enrichment activity — if these even exist.
A national and security need
One could say that this is how the market works: life in the periphery is cheaper, but the services in it are more limited. However, life on the country's borders is not just a consumer choice. The existence of strong communities along the border is a national and security need. The state asks families to live there, raise children, maintain agriculture, education, and community — and sometimes continue to do so even under fire, infiltrations, evacuation, and uncertainty.
A tax benefit will not compensate for the full price that border communities pay. It will express recognition and responsibility and allow them to build a future within a stable economic reality. Tax benefits for eligible communities are indeed regulated in the Income Tax Ordinance, but expansions concerning certain groups of border communities are still determined as temporary orders. Mechora in the Jordan Valley, for example, was not included in the tax benefit map for years. Only this year was it added, alongside other communities in the region, to a 7% benefit, which was applied retroactively from January. However, already at the time of its approval, it was determined that its validity would end at the end of 2027.
For the residents of Mechora, the uncertainty is not a theoretical question. The state recognizes the price involved in living in a threatened and remote community and even grants a benefit in practice, but does not allow families and businesses to know if they will be able to rely on it over time. A family cannot plan a move or the purchase of a house, and a business cannot calculate long-term investment based on a benefit whose future depends on another political struggle.
A permanent policy also has macroeconomic significance. When the rules of the game are known for years ahead, the entire market organizes around them: entrepreneurs plan construction, businesses calculate feasibility, employers recruit employees, and families settle down. Thus, the tax benefit turns from a point-in-time response into a lever for regional growth. When it depends each time on a committee, a temporary order, or a renewed political struggle, the market does not price it as a stable reality — and therefore its impact remains limited.
The state allocates the money anyway. The question is whether this will be a temporary expense, or an investment that will drive private capital, employment, and development in its wake. Strong border communities are not a sectoral interest and are not an election promise. They are a fundamental component of the resilience of the State of Israel.
Tirael Cohen is the president and founder of "Kadma - Youth Settlement".
