The ongoing war with Hezbollah in Lebanon has resulted in staggering financial losses in northern Israel, with total damages estimated at 5 billion shekels ($1.35 billion) over the past 13-and-a-half months.
This figure, which includes direct and indirect damage, highlights the severe economic impact of the prolonged hostilities.
The 5 billion shekel estimate does not include the cost of operations y the Israel Defense Forces, which are believed to run into billions more.
The Israel Tax Authority’s Property Tax Division estimates direct property damage in the northern border region at approximately 1.5 billion shekels ($405 million). This encompasses a wide range of assets, including hundreds of houses, apartments, factories, vehicles, agricultural properties and public infrastructure such as schools and community facilities, according to recent investigations by Ynet.
The indirect damage, however, paints an even direr picture. Estimated at around 4 billion shekels ($1.08 billion), these losses reflect the broader economic fallout from the conflict. Businesses in frontier communities have suffered significant fiscal hardship due to disrupted operations, damaged stock and decreased revenue. The agricultural sector has been particularly hard hit, with many plots unable to produce crops for the foreseeable future.
Amir Dahan, director of the Compensation Fund at the Tax Authority, reports that 2 billion shekels ($540 million) have already been paid out in compensation for indirect damage to businesses and individuals in northern border communities. An additional 2 billion shekels are expected to be disbursed in the coming months.
In a striking contrast that underscores the intensity of the conflict, the damage caused by a single missile strike in Ramat Gan, near Tel Aviv, last week exceeded the combined direct damage in the entire Golan Heights since the war began. The Golan has seen total financial damage of a quarter of a billion shekels ($67.5 million), resulting from attacks from Syria, Iraq and Lebanon.
The southern front communities have not been spared either. Since Oct. 7, 2023, approximately 1.25 billion shekels ($337.5 million) have been paid for direct damages to communities near Gaza. Central Israel has also suffered significant losses, with a single missile in Hod HaSharon, northeast of Ramat Gan, damaging 2,000 apartments, and another strike in northern Tel Aviv causing damage estimated at 50 million shekels ($13.5 million).
These figures from the northern conflict zone dwarf the damage reported from Iran’s missile barrage on Oct. 1, which totaled around 150 million shekels ($40 million) after 2,500 claims for compensation were filed. That attack primarily affected infrastructure in northern and southern Israel, including an Air Force base.
The economic toll of the war extends beyond property damage. The prolonged hostilities have led to the evacuation of numerous communities, disrupting daily life. Businesses in affected areas have been forced to close or operate under severe constraints, leading to substantial indirect losses, and families, especially those who have been forced to evacuate their homes, have suffered immeasurably.
