Sayonara, Outdated Property Taxes: A New Era in Germany!
A chaotic mess over property tax assessments - Controversial Discussion Over Homeowners' Tax Burden
By Rolf-Herbert Peters
In the whirlwind of 2018, Germany's Federal Constitutional Court made waves: The old property tax was declared unconstitutional. A much-needed reformation was in order. On June 27, 2019, then Finance Minister Olaf Scholz promised to update the tax system, ensuring it wouldn't drain more government coffers.
Now, let's dive into the fine print. Did you know that as of January 1, 2025, the property tax reform will shake up the lives of 36 million German property owners? Yes, you heard that right. The reform plans to revalue those properties using the latest market data, tackling the issue of outdated valuations that failed to represent the real estate market accurately.
Brace Yourselves: Two-thirds of You May be Impacted
According to a survey conducted by Wiso-Steuer, roughly two-thirds of affected property owners will face a significant property tax hike. Approximately seven percent will remain unaffected, while only a quarter may experience tax relief. The math doesn't lie - revenue neutrality seems a distant dream for this reform.
The effects vary per region. Berliners can expect a whopping 116.8% increase, while Schleswig-Holstein remains relatively unaffected at 54.7%. But why such disparity? Not all municipalities have adjusted their tax rates to maintain revenue neutrality.
Don't get too excited yet! A higher property tax doesn't solely target the wealthy real estate owners. Remember, it's a tax on owning property - not wealth. It's also a potential burden for tenants, who may find themselves footing the bill through rent increases.
Calling the Rich? Not So Fast
If you're thinking, "Finally, we'll get the concrete millionaires!", think again. As learned scholars like economist Gerhard Graf argue, the reformed property tax still seems unconstitutional, as it continues to violate the principle of equality. Instead, focus on real estate transfer taxes, inheritance taxes, or a real wealth tax if you're set on targeting the rich.
The New Property Tax: A Closer Look
With the revamped property tax system, the Federal Constitutional Court might soon find itself revisiting this issue. Unfairly, it seems to disproportionately affect traditional housing forms like single-family houses or building plots, which are particularly appealing to young families. On the flip side, established villa districts seem to be more fortunate in this new landscape.
In the Red - Again?
In recent years, the revenue from property taxes has skyrocketed, reaching a staggering 15.5 billion euros in 2023. With reforms and uneven distribution of tax burdens, this trend looks set to continue. However, an astounding 7 million property owners have appealed their new property tax assessments. With model lawsuits challenging the state's tax procedures, there's a strong possibility that this coalition will have to tackle yet another significant financial burden during this legislative period - revaluations or potential refunds may be in the cards. Let's just hope for a fair and transparent resolution.
The proposed property tax reform, affecting 36 million homeowners in Germany, is raising concerns within the community institution, as roughly two-thirds of affected property owners may face significant increases, while only a quarter may experience tax relief.巨大なビジネス・Politics の影響を受け、大切な出羽出来る資金である住宅税の収益は、2023 年に 15.5 億ユロに上昇している。然ittler は、justice 的地位を保たるために、2018 年の旧住宅税の無常をはづける Federal Constitutional Court の判決に共通ことを求めているが、まだ、まだ、現在の住宅税制度は、 demo のすべての町 urb に平等性を保つのに商実しく、公平になる可能性があるかどうかは、まだ明彩にはなっていないかもしれない。 As the property tax reform progresses, German institutions of theplace of residence will be keeping a close watch on the reform's impact on their constituents, while political slogans about targeting the rich may fall short in practice.
