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.

Significance of the Issue: The situation not only jeopardizes the financial stability of one of the most ancient Christian establishments in the Holy Land but also rekindles an intense debate over property tax exemptions for religious bodies. This could set a precedent impacting other churches and heighten tensions in an already fragile region. The Greek Orthodox Church stands as one of Israel’s largest landowners, controlling extensive tracts beyond historical churches and religious sites. Notably, the Knesset, Israel’s legislative assembly, is situated on land leased from this Church.

Current Scenario: The freeze is rooted in a longstanding dispute regarding the “Arnona” property tax issue, whose historical exemptions have come under scrutiny in recent years.

The decision of the Jerusalem municipality to freeze the Patriarchate’s accounts was disclosed by Protecting Holy Land Christians, a group established by Patriarch Theophilos III. Enacted independently on August 6, this action is tied to outstanding property taxes, notably the “Arnona,” from which the Patriarchate and similar entities have traditionally been exempt due to long-standing agreements with the State of Israel.

This exemption, adhered to through Ottoman, British, Jordanian, and early Israeli periods, applied to properties devoted to religious purposes. Nonetheless, in 2018, the city revised the definition of this exemption, restricting it to premises strictly used for worship, religious instruction, or directly associated activities, excluding commercial ventures such as guesthouses and cafes serving visitors. This reinterpretation led to claims for substantial back taxes on charitable and religious sites, though the church consistently paid taxes on its commercial holdings.

This adjustment was initially pursued by former Mayor Nir Barkat through the freezing of church accounts, resulting in a three-day shutdown of the Church of the Holy Sepulchre in protest. Though Prime Minister Benjamin Netanyahu’s intervention temporarily halted the effort, the underlying strain has re-emerged, with the latest freeze signifying a renewed effort by the city to recover these contested taxes.

The fiscal repercussions for the Patriarchate are immediate and profound. With its financial resources frozen, the institution is unable to fulfill payroll duties for its clergy, educators, and support staff, a scenario that Protecting Holy Land Christians deems a direct threat to its mission. The group, collaborating with other church leaders in Jerusalem, underscored the Patriarchate’s significant role in delivering educational, welfare, and charitable services to the local community, irrespective of religious affiliation. This issue is not isolated, as the Armenian Patriarchate is also facing a similar legal issue scheduled for deliberation in September, suggesting a wider municipal agenda to reassess tax responsibilities among Christian establishments.

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.