Every tenth household affected?
Associations expect property taxes to rise in 2024
December 29, 2023, 12:32 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
The property tax reform should actually take place without an increase. But for the notoriously cash-strapped municipalities, it is one of the most important sources of income. The Haus & Grund owners’ association and the taxpayers’ association therefore expect additional burdens of hundreds of euros per household for 2024.
The Haus & Grund owners’ association and the taxpayers’ association expect further property tax increases in the coming year. “The increase in property tax rates will continue seamlessly in 2024. The additional burdens per household can be hundreds of euros,” said the President of Haus & Grund, Kai Warnecke, to the “Bild” newspaper. He expects that at least one in ten households will be affected by higher property tax rates in 2024.
The property tax assessment rate is a percentage and is used to determine the amount of property tax. The rate is set by the municipalities, to which all tax revenue goes.
The President of the Taxpayers’ Association, Reiner Holznagel, has no understanding of an increase. “Politicians have actually promised to implement the property tax reform overall without any additional revenue,” he told the “Bild” newspaper. But it is already clear that many municipalities would use the opportunity to increase taxes again. “This means that the state is responsible for increasingly expensive housing.”
“Not be ruled out”
Many tax offices are currently recalculating property tax. The reform became necessary because of a ruling by the Federal Constitutional Court. It declared the previous valuation system unconstitutional in 2018 because similar properties were treated differently. Around 36 million properties need to be revalued. The nationwide revenue from property taxes was recently around 15 billion euros per year.
The Federal Ministry of Finance had stated that some taxpayers would have to pay more property tax as a result of the reform, others less. Overall, property taxes should not increase. However, it is one of the most important sources of income for notoriously cash-strapped municipalities. “It cannot therefore be ruled out that municipalities could be forced to increase property taxes in order to achieve the required budget balances and also to be able to make the necessary expenditure and investments,” explained the German Association of Cities and Municipalities. The deadline for submitting the property tax return expired at the end of January 2023.