Israel Freezes Greek Orthodox Patriarchate’s Bank Accounts Over Tax Dispute

On August 6, 2025, the Jerusalem municipality took the drastic step of freezing all bank accounts belonging to the Greek Orthodox Patriarchate of Jerusalem, igniting a fresh controversy in a decades-long tax dispute that has strained relations between the city and Christian institutions, with the Patriarchate now unable to pay its clergy, teachers, and staff, as reported by The Times of Israel and corroborated by the Greek Reporter.

Why It Matters: This action not only threatens the financial stability of one of the oldest Christian institutions in the Holy Land but also reopens a contentious debate over property tax exemptions for religious organizations, potentially setting a precedent that could affect other churches and escalate tensions in an already volatile region. The Greek Orthodox Church is one of the largest landholders in Israel, controlling large swaths of land far beyond historic churches and religious institutions. The Knesset, Israel’s parliament, is built on land leased from the Orthodox Church. 

The Situation: The freeze stems from a long-standing disagreement over the “Arnona” property tax, with roots tracing back to a historical exemption that has been challenged in recent years.

The Jerusalem municipality’s decision to freeze the Patriarchate’s accounts was announced in a statement from Protecting Holy Land Christians, a group founded by Patriarch Theophilos III. The move, executed unilaterally on August 6, is linked to unpaid property taxes, specifically the “Arnona,” a municipal levy that the Patriarchate and other churches have historically been exempt from under a decades-old agreement with the State of Israel.

This exemption, honored across Ottoman, British, Jordanian, and early Israeli rule, covered properties used for religious purposes. However, in 2018, the city redefined the scope of this exemption, limiting it to properties strictly used for prayer, religious education, or directly related needs, excluding commercial activities like guesthouses and coffee shops that serve pilgrims. This reinterpretation led to demands for tens of millions of shekels in back taxes on charitable and religious properties, even though the church has always paid taxes on its commercial properties.

This is a shift that former Mayor Nir Barkat attempted to enforce by freezing church accounts, prompting a three-day closure of the Church of the Holy Sepulchre in protest. The intervention of Prime Minister Benjamin Netanyahu at the time forced a temporary retreat, but the underlying tension has resurfaced, with the latest freeze signaling a renewed push by the municipality to collect these disputed taxes.

The financial impact on the Patriarchate is immediate and severe. With its funds locked, the institution can no longer meet payroll obligations for its clergy, teachers, and support staff, a situation that Protecting Holy Land Christians described as a direct threat to its mission. The group, which collaborates with other church leaders in Jerusalem, emphasized the Patriarchate’s role in providing educational, welfare, and charitable services to the local population, regardless of faith. This dispute is not isolated; the Armenian Patriarchate faces a similar legal challenge set for discussion in September, indicating a broader strategy by the municipality to reassess tax liabilities across Christian institutions.

The Reaction: Church leaders and advocates have decried the move as an attack on religious freedom.

Protecting Holy Land Christians issued a forceful statement, arguing that the freeze undermines the churches’ vital roles. “As religious bodies, the churches fulfil vital roles by maintaining educational, welfare, and charitable institutions that serve the local population whether Christian or not,” the group asserted, highlighting a tradition of tax exemption spanning centuries. They noted that this status has been upheld across multiple regimes, from the Ottomans to the present day, reflecting a consensus on the churches’ public benefit. The inability to pay salaries has raised alarms about the potential collapse of these services, while the pending Armenian Patriarchate case suggests a coordinated municipal effort that could reshape the financial landscape for all Christian denominations in Jerusalem.

The Bigger Picture: This dispute could have far-reaching consequences for religious and political dynamics.

The freeze places the Greek Orthodox Patriarchate in a precarious position, potentially forcing it to negotiate under duress or seek international support to unfreeze its accounts. The involvement of high-level figures like Netanyahu in past resolutions indicates the political sensitivity of the issue, which could influence Israel’s relations with global Christian communities.

As the September court date for the Armenian Patriarchate approaches, the outcome may set a legal precedent, affecting how religious properties are taxed worldwide. This situation also risks exacerbating existing tensions in Jerusalem, a city already fraught with religious and political conflicts, and could prompt diplomatic interventions from nations with Christian constituencies.

The Bottom Line: The Jerusalem municipality’s freeze of the Greek Orthodox Patriarchate’s bank accounts over a tax dispute on August 6, 2025, marks a critical escalation in a decades-long conflict, threatening the financial viability of a key Christian institution and challenging its historical tax exemptions. With the Patriarchate unable to pay its staff and other churches facing similar pressures, this move could redefine the relationship between religious organizations and municipal authorities, echoing past protests like the 2018 Church of the Holy Sepulchre closure.

Moreover, this incident serves as another example of the Israeli government oppressing the Christian community living in Palestine, where such actions undermine the economic and spiritual stability of a population already burdened by travel restrictions, land confiscations, and other systemic pressures, further straining their resilience in the Holy Land.

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