
Numerous cities are raising property taxes
Whether you are a homeowner, tenant, or business owner, higher property taxes affect us all. For example, tenants are likely to see landlords pass on the higher costs to them in their utility bills. The costs themselves amount to several hundred euros more per year. The increase is probably also a way for local authorities to prepare for the upcoming recalculation of property tax, which will not be fully completed until 2025.
How are the payments calculated?
Property tax is levied on the ownership of land and buildings and must be paid annually by owners. The amount of the payment depends primarily on the property and the building on it. As a general rule, municipalities set their own tax rates and have the final say in the calculation. This means that houses with the same valuation can be assessed at $100 in one municipality and $1,000 in another.
Municipalities raise rates ahead of planned property tax reform
Despite controversy surrounding the new calculation method for property tax reform, municipalities retain the power to decide on their own assessment rates. Trade tax also plays an important role here. Revenue from property tax and trade tax has risen significantly in recent years, which has already had a major impact on the financial situation of municipalities. In general, it can be said that there are major differences in property tax in Germany. According to an analysis by the DIHK, Gladbeck in North Rhine-Westphalia is the frontrunner with a rate of 950 percent, followed by Oberursel in the Taunus region with 947 percent. Bad Homburg recorded the largest increase with 345 percentage points, followed by Xanten and Oberursel.
But why are local authorities continuing to increase property tax?
There are various factors behind the increased property tax hikes. The municipalities are making up for their financial deficits and also compensating for any losses resulting from the property tax reform. This is because the assessment rates are decisive for the actual amount, and these remain within the jurisdiction of the municipalities.
What conclusions can homeowners now draw from the higher payments?
It is understandable that homeowners are concerned about the situation. The situation is particularly uncertain for older owners with large properties in prime locations. No one can predict with certainty how high the property tax will ultimately be after the recalculation in 2025. Nevertheless, property tax is crucial for the financial situation of local authorities. It improves the financing of roads, swimming pools, theaters, and other public facilities and leads to a better quality of life.
Do you need advice on property tax? Whether you are looking for support in selling your property or searching for the perfect home, we are here for you!
Notes:
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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