Numerous cities increase property tax

According to a survey by the German Chamber of Industry and Commerce (DIHK), one in seven municipalities in Germany is increasing property tax. This means that the costs for property owners will rise significantly in many municipalities. But what does this mean for property owners?

Whether you are an owner, tenant or business: higher property taxes affect us all. For tenants, for example, it is likely that landlords will pass on the higher costs to the service charge bill. The costs themselves amount to several hundred euros more per year. The increase is probably also a preparation by the local authorities for the upcoming recalculation of property tax, which will not be fully completed until 2025.

How are the payments calculated?

Property tax is levied on the ownership of land and buildings and must be paid annually by owners. The amount of the payment depends primarily on the plot of land and the building on it. As a general rule, local authorities set their own assessment rates and have the final say in the calculation. This means that houses with the same valuation can be assessed at 100 euros in one municipality and 1000 euros in another.

Local authorities increase rates ahead of planned property tax reform

Despite controversy surrounding the new calculation method for the property tax reform, local authorities retain the power to decide on their assessment rates. Trade tax also plays an important role here. Revenues from property tax and trade tax have risen considerably in recent years, which has already had a significant impact on the financial situation of local authorities. In general, it can be said that there are major differences in Germany with regard to property tax. According to an analysis by the DIHK, Gladbeck in North Rhine-Westphalia with a rate of 950% and Oberursel in the Taunus region with 947% are the frontrunners. Bad Homburg recorded the largest increase at 345 percentage points, followed by Xanten and Oberursel.

But why are local authorities continuing to increase property tax?

The reasons for the increased increases in property tax are due to various factors. The local authorities are settling their financial deficits and also compensating for any losses resulting from the property tax reform. This is because the assessment rates are decisive for the actual amount and these are still under the control of the local authorities.

What conclusions can homeowners now draw from the higher payments?

It is understandable that homeowners are concerned about the situation. In particular, the situation of older owners with large properties in preferred locations is uncertain. No one can predict with certainty what the final level of property tax will be after the recalculation in 2025. Nevertheless, property tax is of crucial importance for the financial situation of local authorities. It improves the financing of roads, swimming pools, theaters and other public facilities and leads to an improved quality of life.

Do you need advice on all aspects of property tax? Whether you are looking for support in selling your property or searching for the perfect home - we are here for you!

Notes:

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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