Many property owners still don’t know how much property tax they will have to pay from 2025. The owners’ association Haus und Grund is now clearly criticizing this. We are talking about “state failure”.
A new property tax calculation will come into effect in a few months – but according to the Haus und Grund owners’ association, the majority of property owners still don’t know how expensive it will be.
Association president Kai Warnecke told Bild am Sonntag: “Around 90 percent of households do not yet know how much property tax they will have to pay next year. This is absurd and a real state failure, after all the state had almost six years to reform.”
Warnecke warned that millions of households would have to expect significantly higher costs. In view of the empty municipal coffers, the municipalities could borrow more. The additional burden could even be more than 1,000 euros per year.
Previous calculation unconstitutional
The reform became necessary because of a ruling by the Federal Constitutional Court. The judges declared the previous valuation system unconstitutional in 2018 because similar properties were treated differently.
Until recently, the tax authorities calculated the value of a property on the basis of outdated data – in West Germany with data from 1964, in East Germany from 1935.
As part of the reform, the tax offices now have to recalculate the property tax for a total of around 36 million properties.
The federal model, with which the property tax is recalculated, is used by nine federal states: Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, Schleswig-Holstein and Thuringia. The remaining federal states have their own calculation models.
Important source of income for municipalities
Property tax revenue is one of the largest sources of income for municipalities. According to the Federal Ministry of Finance, revenue is currently 15 billion euros per year.
The municipalities set the property tax assessment rate. This percentage is used to determine the final amount of property tax per owner. For houses with the same valuation, 100 euros in property tax can be due in one municipality and around 1,000 euros in another.