sale Rental property tax reform

Property tax unconstitutional?
Property tax unconstitutional?

Stuttgart (dpa / lsw) - In a letter to the parliamentary group chairman of the Stuttgart state parliament, the taxpayers' association once again criticized the planned property tax law.

“In addition to the additional burdens associated with the law that threaten many citizens, we have above all expressed constitutional concerns,” writes association chief Zenon Bilaniuk in the paper available to the German press agency. He referred to an opinion by the constitutional lawyer Gregor Kirchhof from the University of Augsburg.

The green-black state government relies on a so-called modified land value model. It provides that the land area and the so-called standard land value should be the basis for the future calculation of the tax. However, owners of residential buildings should be burdened less in proportion. The property tax is to be calculated according to the new system from 2025.

For example, Kirchhoff sees a violation of the principle of equality in the tax assessment based on the land alone, writes Bilaniuk. “Furthermore, the exclusion of buildings from the formation of the tax base clearly violates the principle of tax performance.”

A spokeswoman for the finance ministry rejected the criticism. The state property tax model had been subjected to an intensive legal review in advance. “Among other things, it was assessed by constitutional experts at the expert hearing in the State Ministry that it meets the requirements of the Federal Constitutional Court. In the hearing on the draft law, many associations also emphasized the constitutionality of land value tax. "

The head of the taxpayers' association said: “It will be more expensive for owners and residents.” Every homeowner pays property tax. Owners can pay the property tax themselves or pass it on to tenants as ancillary costs. At the end of 2019, the federal government passed a new property tax law. In addition to land area and standard land value, the type of property, net rent, building area and building age are also included in the federal model. The Greens and CDU in Baden-Württemberg could not be enthusiastic about this. The federal states can deviate from the federal model if they pass their own laws.

According to the information, 5.6 million properties now have to be re-assessed in the south-west alone. The municipalities in the state receive 1.8 billion euros annually from the tax. The taxpayers' association wants to support a possible model lawsuit against the law once the first tax assessments have been issued.

The leader of the FDP parliamentary group in the state parliament, Hans-Ulrich Rülke, announced on Saturday that his party shared the attitude of the taxpayers' association and Professor Kirchhof. The green-black model is neither fair nor constitutional. “The state government must take these concerns seriously and fundamentally correct its draft law,” said Rülke. The reform is also an introduction to wealth taxation, because property tax will in future be based on the location of the property. That is unsuitable because many owners have held their properties for decades. “We therefore reject the planned law and prefer a surface model instead. Only the areas of land are included in the determination of the assessment basis. "

The concept was defended on Saturday by the financial policy spokeswoman for the Greens, Thekla Walker: “I am sure that we are very well positioned with the new land value model.” Experts described the land value tax at the hearing as courageous, innovative and particularly constitutional. The calculation is transparent and understandable for the property owner. “Our model is fair because it privileges residential buildings and relieves tenants. And it motivates to actually build on ready-to-build plots, ”says Walker. In addition, the amount of property tax cannot yet be quantified, it ultimately depends on the municipalities' assessment rate, which has yet to be determined.

SPD parliamentary group leader Andreas Stoch shared the concerns of the taxpayers' association. “In addition, this model is socially extremely unfair if the owner of a low-value house has to pay as much as the neighboring villa owner.” Some homeowners would pay a multiple of the previous property tax, according to model calculations. The green-black state government should urgently pull the rip cord and apply the property tax model developed by the federal government and adopted by the vast majority of the federal states.