Associations expect property tax to rise in 2024
The reform of property tax should actually take place without an increase. However, it is one of the most important sources of income for the notoriously cash-strapped local authorities. The homeowners' association Haus & Grund and the taxpayers' association therefore expect additional charges of hundreds of euros per household in 2024.
The homeowners' association Haus & Grund 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 burden per household could amount to 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 rate is a percentage and is used to determine the amount of property tax. The rate is set by the local authorities, who also receive all the revenue from the tax.
The President of the Taxpayers' Association, Reiner Holznagel, has no sympathy for an increase. "Politicians have actually promised to implement the property tax reform without any additional revenue," he told the Bild newspaper. However, it was already clear that many local authorities would use the opportunity to raise taxes again. "This means that the state is responsible for increasingly expensive housing."
"Not to be ruled out"
Many tax offices are currently recalculating property tax. The reform had become necessary due to a ruling by the Federal Constitutional Court. It had declared the previous valuation system unconstitutional in 2018 because similar properties were treated differently. Around 36 million properties need to be revalued. Nationwide property tax revenue most recently amounted to 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, while others would have to pay less. Overall, however, property tax is not set to increase. However, it is one of the most important sources of income for notoriously cash-strapped local authorities. "Therefore, it cannot be ruled out that municipalities could also be forced to increase property tax in order to achieve the prescribed budget balances and also to be able to make the necessary expenditure and investments," explained the German Association of Towns and Municipalities. The deadline for submitting the property tax return was the end of January 2023.
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The Taxpayers' Association criticizes the potential property tax increase, stating that politicians had promised a reform without additional revenue. Despite the property tax revision due to a constitutional court ruling, some local authorities may increase taxes to meet budget requirements and fund necessary investments. Meanwhile, the Real Estate Association and Taxpayers' Association anticipate significant property tax increases for hundreds of euros per household in 2024, potentially affecting one in ten households.
Source: www.ntv.de
