Property Tax Reform Coming to Germany?

Well.....maybe.

Here's the deal....the German Supreme Court (the Federal Constitutional Court) had a meeting and declared that the decades-old program of property tax (which is what really funds a good chunk of local revenue spending for cities)...MUST be redone....as the current program for property tax is unconstitutional.  They were nice about the timing....giving the Bundestag about 18 months to create the next program.  The chief trigger to this 'unfairness'?  The basic unit of taxation was a unit value ​​which had not been readjusted for decades (in western Germany, it was set to 1964 and in eastern Germany....it was set to 1935).

So I picked up the public TV news from ARD (public TV, Channel One) this morning.

The new plan from the German Finance Minister (Olaf Scholz, SPD Party)?  Across the entire nation....the property tax will be calculated individually....for each single house, apartment, condo, cabin, palace, etc. 

The qualifier is that it'll distribute the 'burden' in some fair method.

The gimmick to this?  No longer will you be able to say your property tax situation for some fancy upscale 1800s villa in Hamburg is the same as some 1958-built upscale condo in Wiesbaden.

The sales gimmick to this?  The claim of minimum bureaucracy.

The chief basis for each property?  So they say.....net rent or mortgage cost, square meters, year of construction, site area and ground reference value (which will float depending on your upscale or downscale situation).

Screwed up?  Well.....here's the deal.  If you were a town of 3,000 residents and 1,500 residences (apartments, houses, etc)....having x-amount of property tax revenue....whatever system is created, has to equal or be more, than the previous system.  The odds of some folks having their property tax go up by more than 20-percent? That's the threat that people worry about.  You could easily see some property that had only 500 Euro a year as property tax (650 US dollars roughly) and find with the new system that it's closer to 1000 Euro a year (1,200 US dollars roughly). 

My suspicion is that whatever is created....will drive some massive lawyer-hiring and legal battles going on for years to debate the fairness of their tax increase that people got saddled with.  As much as the court felt the old system was unfair.....this massive legal fight over the new unfairness will be a spectacle to watch.