Property Tax Changes Proposed in Germany
Ulrika Lomas, tax-news.com
The court found that the current practice of taxing both developed and undevloped property on pre 2000 values.
German property tax is currently levied by local authorities and is a reliable source of revenue for towns and cities, generating more than EUR12bn every year. Currently, German property tax is calculated according to unit values from 1964 in the case of old, former West German states and West Berlin and from as far back as 1935 in the case of new states in former East Germany and East Berlin. According to the court, however, such different treatment can no longer be justified by transitional difficulties arising from German reunification.
Reform of local property tax in Germany is currently under discussion, however, and a working group set up in January has been tasked with drafting a concept. In February this year, the International Monetary Fund (IMF) also advocated reform of property tax in Germany as a possible means of supporting local finances.