Property tax: Scholz wants to calm tenants – economy

• The planned reform of the property tax faces the resistance of many tenants and landowners. They are always afraid of higher costs.
• Finance Minister Olaf Scholz is trying to dispel these concerns. They want to reform the property tax so that there is "no more burden for the residents".

Federal Finance Minister Olaf Scholz again met with finance ministers from the states recruited for his property tax reform proposals ahead of the meeting. "The discussions are starting very carefully now," he said Wednesday in Berlin. This requires a lot of expertise, "but I'm sure we can do it". It seeks a solution that serves two purposes: "first, do what the Federal Constitutional Court has delivered us, and second, protect taxpayers from a heavier burden".

Monday, the first ideas of the Federal Ministry of Finance on a concept of reform had been known. They have encountered a lot of resistance in both federal states, as well as in renters and homeowners, who fear a sharp increase in financial burden. Scholz tried to put the reserves in perspective. "We are now discussing two different possibilities: a more land-based and building-land-based model, and a land value model, allowing us to take into account that some parcels are not worth much and 'we want to make it possible for local people not to pay such high taxes'.

An important component of the property tax should sink "very particularly mbadive"

Scholz stated that they had calculated everything accordingly and that they had tried "to change the property tax system so that residents would no longer be under excessive load." For example, the tax measure used for calculation and multiplied by real estate values ​​would be "very mbadive". Scholz called a value of 0.319 per thousand.

This mbadive reduction means that the capital gain acquired in recent decades will no longer be translated into property taxation. "We completely neutralized that." The result will be "that we will not increase the tax revenues that communities are now collecting from the land tax". This was an important step for tenants and those who owned their own homes.

Scholz wanted to meet his compatriots early Wednesday night. The Federal Constitutional Court has instructed the legislator to reorganize the legal basis for taxation of real estate. He has time for the first legal measures, until the end of next year, Scholz said. By the end of 2024, further preparatory work should be completed until the new property tax can be levied from January 2025.