Property Tax Reform: Tenants Benefit the Most

According to new calculations, Olaf Scholz‘ (SPD) proposed reform will positively affect tenant parties. Owners of undeveloped properties on the other hand are going to have a tough time.

Builders are going to be relieved: The new property tax reform seems to offer enough incentives. (Source: pexels.com)

There has been a hesitant reception to finance minister Olaf Scholz’ (SPD) draft. Following a value-based approach, the property tax reform should benefit certain property categories while putting others in disadvantage. However, what that actually means for tenants and landlords has been now unveiled in a report by WirtschaftsWoche, which obtains calculations by the ministry.

By these numbers, residents in both rented flats and condominiums would receive property tax cuts by 20 or 16 percent respectively. Undeveloped properties however would be charged by a more than doubled property tax (+108 percent) if this reform gets realised. Admittedly, this value can be even higher.

Because in order for municipalities to meet their total volume of 14 billion euro, individual adjustments to the assessment rates of these properties are expected. A “special municipal factor option for ready to be built, undeveloped areas” might be an “expedient” part of the property tax.

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