Altering or improving the structure of something. - State suggests reducing assessment rates for local governments on real estate taxes
In regards to the property tax reformation, Hesse suggests reducing the tax rate for 344 municipalities in determining the levy. 72 cities and municipalities should instead raise this percentage, while 5 must maintain their original value, as Finance Minister Alexander Lorz (CDU) explained in Wiesbaden on Thursday.
The term "tax rate" in municipal tax law refers to the factor that determines the tax liability. It directly impacts the amount property owners have to pay for property tax after the reformation.
The property tax is being restructured across the country and, starting in 2025, new calculation rules will be implemented. The main goal is revenue neutrality - municipalities should collect roughly the same amount of property tax with the new law as they did in 2024. The key means of achieving this is through the tax rate.
In preparation for the change, property owners had to submit property tax declarations with various data. As a result, municipalities are expected to adjust their tax rates. The state's suggestions are not compulsory for the municipalities. It's only when a city or municipality makes its decision on its tax rates for 2025 that the calculation of who must pay how much property tax can take place.
For more information on the property tax reformation, [see the link].
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The proposed property tax reform in Hesse suggests reducing the tax rate for 344 municipalities, while 72 cities and municipalities must increase this percentage and 5 must maintain it, as per Finance Minister Alexander Lorz from Wiesbaden.
This property tax reform, affecting municipalities across the country, aims for revenue neutrality by 2025, ensuring municipalities collect roughly the same amount as in 2024 through new calculation rules and tax rate adjustments.
Discussions on this property tax reform have also involved the CDU party, offering suggestions for the municipalities to consider but not mandating any decisions.
In response to the state's suggestions, property owners have submitted tax declarations with necessary data, which have led municipalities to anticipate adjusting their property tax rates for 2025.
