Monday, January 15, 2018

The Property Tax Story

Its a page two story, but a fair number of Germans will be curious about what happens shortly.  The German Constitutional Court is going to hear a case where a challenge is mounted over property tax (affecting roughly 35-million properties throughout Germany).

The suggestion here against the property tax is that it's unfair in terms of the relationship with the German Constitution (the Basic Law).

If you count up all the collected money via the sixteen German states....it amounts to thirteen billion Euro, a fair sum of money.

Even if you rent from some guy.....he's figuring his property tax into your rent money, and you are helping to pay it.

The unfairness issue?  It's built to be progressive.  That means that a very marginal property or house would be taxed at one rate, while a dynamic or highly valued property is taxed at a higher rate.  The Constitutional doesn't really suggest a formula or a relationship, and some folks think this is the chance to force change upon the whole law.

ARD even pointed out on this issue....you could have two plots of property in different locations.  One might still be assessed the value that it held in 1964, and the other the value of 2018. 

There are various ways that the court could review and pass judgement.  The worry for cities here....because it's their bread-and-butter money....if you say it's built totally wrong, then what happens?  Typically the court would then turn to the Bundestag and say....write a new law within two years. 

The odds that you might end up with a forced change and have to pay even more on the property tax?  Well....yeah....that's been suggested and folks are a bit worried over where this might go.  My guess is that if you live in a highly urbanized and metropolitan area....you likely end up getting screwed if they change the system, and probably end up paying double the property tax that you currently pay. 

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