"However, hotels, halls and businesses cannot be exempt from municipal taxes simply because they are owned by the churches. These are not houses of worship," it said in a statement. "We will no longer require Jerusalem's residents to bear the burden of these huge sums."
Jerusalem is one of the country's poorest cities, and the tax revenue from the properties is estimated to be tens of millions of dollars.
Separately, Parliament is pursuing a bill that will appropriate lands in Israel sold by churches to anonymous buyers since 2010. The bill's sponsor, lawmaker Rachel Azaria, said these questionable sales have plunged thousands of Jerusalem residents into uncertainty over their living conditions.
She said the bill was aimed to protect apartment owners against property speculators and had "nothing whatsoever" to do with the churches. "We have no intention ... to make them feel unwelcome," she said.
- AP