New property tax rates: Cities react to nationwide reform!

New property tax rates: Cities react to nationwide reform!

The cities of Nuremberg, Erlangen and Fürth have announced plans for resigning their property tax rates, while Schwabach will follow tribute in November. These adjustments apply from January 1, 2025 and are a direct reaction to a nationwide property tax reform, which was initiated by a decision by the Federal Constitutional Court.

On April 10, 2018, the court declared the previously valid unit assessment for unconstitutional, since it was based on outdated values and resulted in unequal treatment of taxpayers. In November 2019, the federal legislature passed a reform to remedy this grievance. This is binding for the municipalities and leads to new property tax measurements that have to implement the municipalities from next year.

lifting rates in detail

As the total property tax is calculated, it can be explained using a simple formula: The property tax measurement amount is multiplied by the lifting rate specified by the municipality. For Nuremberg, the calculations result in a new rate for property tax B of 780 percent, which is an increase compared to the previous 555 percent. The city council of Nuremberg will vote on this decision on October 23, 2024.

Erlangen proposes a rate of 625 percent in order to achieve the 2019 income level after it had previously been reduced to 425 percent. This is particularly important for the city, which then wants to improve the tense budget situation with the increased income. The Erlangen City Council will decide on this proposal on October 24, 2024.

In Fürth, an adaptation of the rate of lifting is provided for property tax B to 660 percent. This increase also serves to maintain current tax revenue. The city council will take a decision on October 24, 2024. Schwabach, on the other hand, estimates that the future rate for property tax B will easily increase from 450 percent, which will eventually be decided on November 22, 2024.

The reform aims to make the property tax on the property. This means that the new lifting rates should not lead to additional income for the municipalities. For example, the total amount of property tax in Nuremberg in 2023 was 123.86 million euros. An expected adjustment of the lifting rate could lead to changes in the amount of property tax for individual taxpayers, but not fundamentally to increase tax revenue as a whole.

The exact amount of the property tax is significantly determined by the tax office. The municipalities are dependent on the information from the taxpayers. However, errors can occur when collecting the property tax measurements. Estimates of the Bavarian Cities Day state that up to 20 percent of the measurement amounts may be incorrect. This could result in many taxpayers have to have adjustments after receiving the notices.

Another uncertainty is that the estimated 10 percent of the measurement amounts have not yet been determined and any corrections will certainly be necessary in the coming months. The municipalities strive to act as transparently as possible when determining the new rate and emphasize the need to carefully take the different factors into account.

A central point is the equal treatment of all taxpayers. With the upcoming entry into force of the new lifting rates, the cities want to ensure that all citizens are treated fairly. This is done in a legal framework, which takes into account both the legal requirements of the federal government and the financial requirements on site. The decisions are crucial for the future housekeeping of the cities and contribute to creating a solid financial basis for the coming years.

For more information about the details of this property tax reform and the adjustments of the lifting rates, See the report on www.marktspiegel.de .