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Berlin property tax rate significantly reduced

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The nationwide property tax reform announced for 2025 is not intended to make housing costs in Berlin more expensive. This is to be prevented by several changes to the key points of the tax.

A law to this effect was passed by the House of Representatives on Thursday with a majority of the CDU and SPD. Above all, the so-called assessment rate will be significantly reduced from 810 to 470 per cent from 2025.

Adjustment in favour of inhabited properties

In addition, the tax assessment figure will be changed in favour of occupied properties. This is intended to avoid a higher burden compared to commercially used or undeveloped properties. According to the new law, it will be 0.31 per mille for residential properties from the beginning of next year and 0.45 per mille for other properties.

Tax rate may increase in individual cases

Both changes should help to ensure that Berliners do not generally pay significantly more property tax than before. However, in individual cases where very little property tax has been payable to date, the tax amount may increase significantly. On average, however, the tax burden will not increase, as Finance Senator Stefan Evers (CDU) has repeatedly assured. In Berlin, the revenue last year totalled around 860 million euros.

Hardship regulation planned

CDU MP Johannes Kraft said that the premise was that housing should not become more expensive. Among other things, the measurement figures had been adjusted to achieve this. However, the law also provides for a hardship provision for those who are unable to pay their increased property tax.

New nationwide calculation bases from 2025

Property tax is being reformed nationwide by order of the Federal Constitutional Court. From 2025, new, more standardised calculation bases will apply, which will take greater account of the current value of properties and land than before. In Berlin, around 870,000 land and property owners had to submit a large amount of information that formed the basis for so-called property tax value assessments. These often stated property tax values that were considerably higher than the previous property tax. However, property tax is calculated on the basis of several factors. The formula for this is property tax value x tax base x assessment rate.

Author: dpa/deepl.com
Publication date: 20 June 2024
Last updated: 20 June 2024

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