The German Association of cities rejects speculation that local authorities could use the Reform of the land tax for drastic tax increases.

“The municipalities will change their rates in such a way that today’s revenues will be achieved,” said Verena Göppert, Deputy chief Executive of the Association of cities, the German press Agency in Berlin. “You don’t want to use the Reform to restructure their budgets.”

Background are example bills of the owners ‘ Association Haus & Grund, whereby it can be to come according to the plans of Finance Minister Olaf Scholz (SPD) to the new property tax in certain cases, drastic tax increases.

Göppert said, the bills have two major weaknesses: “you have a look at exceptional cases in which the fundamental values of tax due to the outdated Plot so far is very low. In addition, these Figures do not take into account the future rate of the municipalities, which are determined in many cases.” The examples were, therefore, not realistic, like the average reason will be expensive to develop the amount for people with your own home or for tenants.

The Federal constitutional court had been due to obsolete bases requires a revision of the land tax until the end of 2019. Currently, land values are from 1935 in the East, and from 1964 to be used in West Germany. The plots are now for 1. January 2022 to be re-assessed, and thereafter every seven years. In particular, the value of the land and the average rent are expected to play a role.

So this is the first revaluation will not lead to decades of massive increases in tax, Scholz plans to reduce the so-called tax-measuring number of solid. In addition, Scholz expects the municipalities to reduce an additional calculation factor, the rate of assessment. In this way, it should give the bottom line a total of no more burdens of tenants and home-owners. The property tax, with a revenue of around 14 billion euros per year, one of the most important sources of income for the municipalities.

“The cities have early on declared that the Reform of the basic tax is to be revenue-neutral,” said goeppert. “Here there is a common line of the Federal government, the länder and the municipalities.” It is going to secure the volume of land tax by the Reform in the future. The municipalities need the revenue after the Reform, in order to Finance parts of their infrastructure for the citizens, for example, schools and swimming pools.

The old property tax-based values in a completely obsolete Plot. “Therefore, it is not surprising, if the individual tax bill can vary according to a Reform times lower or higher. Overall, however, it is not a higher estate tax, but of tax fairness.”

Also, the Ministry of Finance had rejected the calculations of Haus & Grund sharp. The Association have beat the mayors of all places, announced the lowering of the rate aware. “With serious calculations that has nothing to do with it – that’s Propaganda.”

Finance Minister Olaf Scholz (SPD) had submitted a draft for a Reform of the land tax, the crashes, however, in the Union with skepticism. The Cabinet of Ministers to deal at the end of April with the draft.

dpa