Criticism of Delayed Property Tax Reform in Germany

The property owners' association, Haus & Grund, has voiced strong criticism over the delayed implementation of Germany's property tax reform, labeling it as a 'state failure.' President Karl Warnecke highlighted the alarming fact that approximately 90% of households remain unaware of their property tax obligations for the upcoming year. This uncertainty persists despite the government having nearly six years to implement the reform mandated by the Federal Constitutional Court in 2018.

The court had declared the previous property tax system unconstitutional, as it inconsistently treated similar properties. Consequently, financial authorities must now recalibrate the tax for around 36 million properties. Warnecke warns that the sluggish pace of this process could lead to significant financial burdens for many. With municipal coffers running low, there is a likelihood that local governments may increase tax rates, potentially adding more than 1,000 euros annually to household expenses.

Municipalities hold the authority to set property tax rates, which are crucial revenue streams for local budgets. Given the fiscal challenges faced by many municipalities, an increase in these rates seems probable. This scenario threatens to make housing more expensive for millions of German citizens, exacerbating household financial strains. Haus & Grund's criticisms underscore the need for more efficient governmental action to alleviate the impending financial impact on property owners across the nation.