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BAs part of the property tax reform, Olaf Scholz wants to avoid placing a heavier burden on tenants and landlords. "We are trying to change the property tax system so that tenants, residents, are no longer burdened," said the SPD minister on Wednesday shortly before the first talks with his country colleagues. ,
"It also works with the proposals we have developed." The planned calculation models will ensure that the higher valuation of land and buildings does not result in a real estate tax burden.
"The result will be that we will not increase the tax revenues that communities now have on property taxes," he promised. This is also important for tenants and users of their own real estate. "Discussions are starting now … but I'm sure we can do it."
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In doing so, the Minister of Finance could have prepared an astonishing gesture to put his fellow citizens in the line of fire. In the end, it may be necessary to amend the Basic Law – and for that, the federal government needs the approval of the federal states.
In his meeting with finance ministers, Scholz initially addressed two alternative proposals for property tax reform covering 36 million homes, buildings and land, bringing in about 14 billion euros to cities each year.
Mega-complicated calculation method
For which federal model and state decide, is not yet determined. However, it was important for all stakeholders that tax revenues remain as high as possible and that municipalities do not obtain lower revenues than previously through reform.
Experts and observers were badured in advance that Scholz would go first to the more complicated of the two variants. Indeed, the Federal Constitutional Court obliged the legislator, in the judgment against the current system, to take into account the economic exploitation of real estate in the future taxation.
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However, this is only successful if homes and apartments are evaluated in one way or another. This has never happened in recent decades. Here, after all that is known so far, Scholz has developed the most complex procedure: a combination of economic profitability, area of land and year of construction of residential buildings.
First, it would remain with the current calculation method, in which unit values of real estate are multiplied by a tax measure number and the municipal tax rate. After all, it would have the charm of not having to change the basic law. Because the constitutional judges had specifically criticized the unitary value, it should only change that.
The costs of collecting the new tax will be significant
And it was at that time that the finance minister apparently took a deep breath in the math box. In the future, the calculation of the unit value could include the net cold rent, the living space, the year of construction, the area and the reference value on the ground.
Of course, the tax authorities still do not have the necessary data – even if the simple construction values have been obsolete for decades. Current data should therefore provide homeowners and homeowners with income tax returns early in 2020. The rent could be determined using the micro-census of the Federal Statistical Office – possibly also on the basis of housing benefit tables.
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Only that shows: The new property tax consumes. Perhaps even so expensive that collection costs represent a good deal of tax revenue. But it continues. According to Dirk Löhr, professor of taxation at the University of Trier, even if living space is used at the latest, there is a dispute: "If a tenant wishes – and the property tax is redistributed – he can continue the landlord and recalculate it again, requiring a living space. "
Even the determination of the year of construction is likely to litigation, but between the owner and the tax office. Because technically, the year of origin is not the year of construction. "There are 1880 properties built that are in excellent condition today due to renovations.
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Scholz property tax plans
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Conversely, there are also buildings built in 1980, which are in a miserable condition not to be maintained. So evaluators often rely on residual economic lives, "says Löhr.
Tax offices may be overwhelmed
At the latest here, most tax bureaus are likely to get out of business. Or take years to determine the new unit values. Karlsruhe, however, set a deadline of 2025. "The model is very complex and bureaucratic," says Michael Voigtländer, real estate economist at the Institute of German Business (IW).
"It's based on the load close to the current model, that's probably the reason for the proposal." But there is one crucial difference: since the economic value of a property must be taken into account, the system necessarily means that expensive real estate is taxed more than cheaper real estate.
"The result would be a substantial partial increase in property taxes, especially when rents have risen in recent years: in metropolises and urban centers," said Jürgen Michael Schick, president of the badociation's business badociation. IVD real estate industry. "On the other hand, structurally weaker communities will try to compensate for the lower revenue from property taxes through higher tax rates." To give up – this will probably not want community.
To simplify taxes, the basic law needs to be changed
So, if Scholz really wants to keep his promise not to burden tenants and landlords further, he has to make sure that people in inner city neighborhoods are not punished for living in expensive housing. This could work with the alternative, combining a simple calculation of living space and property value. After all, he is before the expert committees and would not have to be redetermined.
Some experts therefore believe that Scholz will put this proposal on the table only when everyone realizes that there is no other way. For this alternative proposal, the Basic Law should be amended. But if you confront the country's finance ministers long enough to see tax offices overloaded, it could even work. An expert said in the perspective of the evening meeting: "A thug who thinks badly."
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