In the past twenty-four hours, this story over property tax challenges to the German Constitutional Court (the Supreme Court of Germany) has moved up to one of the top three stories on the news. N-TV did a great piece this morning to bring all of the facts down to a simple story.
No one will argue about the whole German property tax law being an outdated and screwed-up method. The quiet and hidden truth is that they simply haven't wanted to update the law out of fear of what it'd do (mostly raise taxes on a fair number of folks, and create a housing shortage while people adjust to the new taxing scheme).
German homeowners are not paying property taxes over current market values....but a value adjusted in western Germany since 1964, and over in the former DDR (eastern Germany) it's an adjusted value going to 1935.
In every sense of the world....it's totally outdated and unfair.
The amusing side to this story is that this property tax is the money that goes straight to the community, village, town or city.....not via the financial funnel to Berlin and then coming back. Every single mayor can show you a chart of how much is expected now, and in five years. Every mayor who has house expansion (growth, construction) is sitting there and grinning because he's got X-number of houses coming up each year and adding to his tax-base. A great example in my region is Idstein, where a housing development for the past five years has added at least forty houses per year, and there's probably still another three-hundred houses to go.
Once a new tax scheme is created....whatever increased taxes occur....will be dumped upon the home-owners. If you owned two or three houses (a common investment scheme), then you would hand the cost of the tax increase down to the renters, so everyone in Germany would feel the brunt pain of an increase.
In some ways, this whole discussion in the court, will bring on a recession period and some tough dynamics that will stall the German economy for at least a year.
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