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Property tax increase: Mayors demand adjustment for communities!
On December 10, 2024, municipalities in Klagenfurt-Land will discuss increasing property taxes to secure municipal finances.
Property tax increase: Mayors demand adjustment for communities!
In the last few weeks, the discussion about property tax in Austria and Germany has intensified. In view of a billion-dollar deficit in the state budget, the Institute for Advanced Studies (IHS) is calling for an increase in property taxes for homes and land. The majority of Klagenfurt-Land mayors like Andreas Scherwitzl have spoken out in favor of this measure in order to secure the financial stability of the communities. Scherwitzl emphasizes that property taxes have not been adjusted since the 1970s, even though the cost of living and property prices have risen sharply since then. As a result, the property tax has now mutated into a trivial tax, while municipal spending, for example on infrastructure, continues to grow constantly meinkreis.at reported.
Increasing tax rates in Germany
Parallel to the situation in Austria, a study by EY shows that property tax in Germany is at a record high. In 2023, 2,671 municipalities increased their property tax assessment rate, which corresponds to an average increase of 409 percent. This is the largest increase since the surveys began in 2005. In many cities and municipalities, this tax is used as a central source of income to finance important services such as the operation of swimming pools or theaters. It becomes clear that municipalities are under pressure to improve their financial situation, especially after reforms in municipal financial equalization, which led to higher assessment rates in many regions. So also report tagesschau.de about cities and municipalities asking citizens to pay more.
The upcoming property tax reform will come into force from 2025 after the Federal Constitutional Court declared the previous calculation method unconstitutional. Many municipalities see the reform as an opportunity to increase their revenue, which could lead to a variety of tax increases. The experts warn that the financial situation of cities remains precarious and citizens may continue to be affected by rising taxes.