Saturday, October 26, 2024

Explaining The German Property Tax 'Mess'

  Back in 2018, the German Constitutional Court ruled that the current property tax structure.....was NOT in line with the constitution. 

Reasoning?  Properties were taxed based on their value from the early 1960s (1930s in East Germany), which happened to violate the idea of horizontal equity.  

So the federal folks spent around five years trying write the 'wording'.

The sixteen states....by early January....have to send out the new assessments (based on info that residents provided back in 2023).

Here's the key issue....some states have moved on....to mail out the assessments, and the property taxes have gone UP drastically....in some cases...double and triple what they were before.

You see...in this process....no one in the federal apparatus wrote a 'limit-code' (meaning....you could only go up 20-to-30 percent over the old rate).

All of this triggering massive public anger?  Oh, I'd say that 50-percent of the public is asking questions, and talking about some legal challenges.  Crappy planning?  You would think in the property tax discussion.....you'd avoid surprises (like doubling your property tax).  

This property tax being the only method for the local city/town to make extra  income?  Yeah, that is part of the problem.

Going into an election year with this mess?  That's another discussion item....by itself.

Renters also getting stuck on the problem?  Yeah....if you own a property and your tax tripled up (say 1,500 Euro higher).....you (the owner) will divide the cost among the rent-people....so their monthly rent will go by 20 to 40 Euro minimum.

All of this leading to a 2nd revision?  Yeah, that's my bet.  

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