Good property tax
The Union has prevailed in the dispute over property tax. Even if the tax advisors will not be happy – the competition that is now possible is not bad.
Nand it can go very quickly. If the coalition committee approves the compromise, the cabinet could get the new property tax off the ground next Wednesday. If the signals are not misleading, the Union will prevail with its wish to allow the countries to regulate the tax within their borders according to their own ideas.
Bavaria could then determine the burden that both owners who live in their own four walls and tenants hit with the areas of land and buildings alone – while the other federal states, which do not make use of the opening clause, also the standard land value and take into account the average rent. This should be secured with an amendment to the Basic Law.
Who wins, who loses? This is difficult to predict for the individual case, as the tax burden is the product of the initial value, measurement figure and rate of assessment. The first value will certainly increase, since up to now the property tax has been levied on the basis of the standard values from 1964 in the west and even in 1935 in the east.
Land cannot run away
Anyone looking for affordable residential property today will experience painfully just how much prices have risen in this decade alone. To compensate for the higher initial value, the measurement number is significantly reduced – to around a tenth of the current value. Federal Finance Minister Scholz (SPD) promises that all municipalities will also lower the rate of assessment, if that is not enough, because otherwise the mayors and councilors would have to fear the anger of their voters.
With that he promises more than he can guarantee. From the point of view of the municipal representatives, it could be tempting to reap certain additional income – especially since they are better able than usual to pass the blame on to others.
With this compromise, the CSU and the Union parliamentary group will leave the field as the political winners. Even if the tax consultants are not happy when different rules apply in Hamburg than in Hof, there is little to be said against the opening clause.
If cities have the right to set the amount of the tax at their own discretion, the countries to which the municipalities belong should also have the opportunity to determine the rules for it. There is no fear that weaker countries will bleed to death as a result of tax policy competition – after all, real estate cannot run away.