Talking Property Taxes

A couple of weeks ago, I essayed about the German Supreme Court dumping the property tax structure back into the lap of the Bundestag.  Basically, they said that the system was built in an unfair fashion.  Oddly, you can go around to a hundred Germans who owned houses, and I would suggest that more than eighty-percent would have readily agreed on the unfair nature of the structure.

So, a new property tax system has to be devised.  What this money pours into....is the local city government.  That's their cash to function...pay for street repairs....landscaping....etc.

Well...ARD (public TV, Channel One) hyped up the topic today because discussions started up.

Three models are on the table:

1.  Land value model.  Here, the value of a piece of land is the basis for the amount of the tax owed to the city/village.

2.  Cost value model.  Basically, whatever you built on the property is the rate of taxation.  In this case, they note even renovation done. 

3.  Equivalence model.  the area of ​​land and buildings would be the basis of the formula for the amount of tax rather than the value of land and real estate.

Naturally....some folks are advocating their selection.  As some have pointed out....whatever comes out of this....needs to be very plain and simple to understand.

Why all of this matters?  Well....the amount collected across all of Germany, for the cities/villages....is fourteen billion Euro.

Somewhere in the words handed down by the court system, they strongly suggested that whatever formula that is selected....has to basically come fairly near fourteen billion Euro. 

I sat and paused over this whole selection.  Major problems lay ahead.  You could have plan X selected, and highly urbanized areas would greatly benefit, with a 10-percent increase in taxation....while highly rural communities could see a 10-percent decrease in taxation.  The fact that the money isn't shared out....means a plus-up for one community and a subtraction for another.  They might still equal fourteen billion Euro, but someone would lose funding.

You can imagine some Germans having an inspector come around the property and try to assess the building itself, or some hyped-up garage unit.  Germans aren't exactly happy over any inspection.

So I don't really think this property tax business will go easily to some solution.  It's going to be around for the next decade, with people whining over the 'fix'.