Property tax - MV does not want to shake up new property tax rules
The rules for the new property tax in Mecklenburg-Vorpommern will not be changed despite criticism from Schwerin Mayor Rico Badenschier (SPD), as stated in a communication from the Finance Ministry. The state government and the City and Town Council rejected requests for changes. Mecklenburg-Vorpommern, like many other states, follows the federal model.
No systematic increase in residential property values
According to information from the state capital Schwerin, investigations have been conducted to determine if the new property tax, which is set to take effect in 2025, systematically increases residential property values and reduces the burden on commercial property owners. A spokesperson for the Finance Ministry stated that investigations of comparable properties have not confirmed this.
The property tax reform reflects the real estate market developments of the last decades and is aligned with these. The Federal Constitutional Court has so decreed. It is indeed possible for some owners to pay more than before and others less, the spokesperson said. "Shifts are even the inevitable consequence of the reform, as they aim to eliminate long-term value shifts and injustices."
Badenschier had criticized in the spring, based on initial data from the state capital, that the property tax on residential properties would systematically increase and that on commercial properties would decrease as a result of the reform. The Association of Nord German Housing Companies, a consortium of socially-oriented landlords, also expressed this criticism. Other federal states have counteracted, it was reported.
The Finance Ministry argued that changing the rules like in Schleswig-Holstein and North Rhine-Westphalia would bring new constitutional risks for the municipalities.
Regulation for extreme cases
Anyone who finds that their property has been excessively valued and will therefore have to pay an excessively high property tax in the future will have the opportunity to defend themselves. Mecklenburg-Vorpommern will use a federally coordinated regulation for extreme cases, according to the Finance Ministry. This regulation stipulates that the assessed property value may not exceed the market value by more than 40 percent.
"If this limit is exceeded, the market value determined by an appraiser should be used instead. This regulation also aims to prevent excessive taxation in Mecklenburg-Vorpommern." The appraiser must be commissioned by the owner. Mecklenburg-Vorpommern is observing a decision of the Federal Finance Court from May of this year with this regulation.
- Despite the opposition from Schwerin Mayor Rico Badenschier of the SPD, the SPD-led BMF in Mecklenburg-Western Pomerania remains firm on not altering the rules for the upcoming property tax, citing adherence to the federal model.
- The new property tax reform in Mecklenburg-Western Pomerania, set to be implemented in 2025, may result in some homeowners paying more and others less, as noted by a spokesperson from the Finance Ministry, reflecting market developments of the past decades.
- Following criticism from Schwerin Mayor Badenschier and the Nord German Housing Companies, the Finance Ministry in Mecklenburg-Western Pomerania has implemented a regulation for extreme cases to prevent excessively high property taxes, ensuring that assessed property value does not exceed the market value by more than 40%.
- The implementation of the new property tax in Mecklenburg-Western Pomerania, like in other German states, will affect homeowners and commercial property owners differently, and municipalities should be aware of the potential constitutional risks associated with altering the rules, as argued by the Finance Ministry.
