Karlsruhe leads in terms of trade tax assessment rate – 450 percent in focus!

Karlsruhe leads in terms of trade tax assessment rate – 450 percent in focus!

The latest developments in Baden-Württemberg currently show that there is a lot of movement in the assessment rates for real taxes. In the first quarter of 2025, 1,059 of 1,101 municipalities adjusted their real tax assessment rates, which raises several questions for citizens and politicians in the region. What is particularly noticeable is the highest trade tax rate, which was achieved in Karlsruhe at 450 percent, while Walldorf remains the lowest at only 265 percent. This shows that cities and municipalities must think strategically about how they design their assessment rates in order to both secure income and not place an excessive burden on citizens. These adjustments are the result of the property tax reform, which came into force at the beginning of 2025 and which particularly affects the assessment rates.

As the goodnews4 reported, 139 municipalities have increased the assessment rate for trade tax, which corresponds to 12.6 percent. Fahrenbach, Forchheim, Ilsfeld and Ötigheim stood out, each implementing an increase of 50 percentage points. In contrast, there were also communities like Mulfingen that reduced the trade tax rate by 20 percentage points. A change in these financial conditions not only impacts local communities, but also local companies and their tax burden.

The property tax reform in detail

As part of this reform, property owners must: Baden-Württemberg Ministry of Finance declares that they will pay property tax from 2025, the amount of which will be determined by the local councils via the assessment rates. The newly introduced transparency register for property tax assessment amounts provides an overview of the necessary assessment rates for the so-called “revenue neutrality”. The aim is for municipalities to generate similar income as before despite the reform.

The new assessment rates will still burden the owners differently. From January 1, 2025, property tax in the country will be levied according to the “modified land value model”, which means that property owners must choose their assessment rate so that income remains largely at the level of the previous year. An example of this: A municipality that collected 50 million euros in property tax in 2024 should adjust its assessment rate accordingly in order to generate around 50 million euros in 2025.

A look into the future

Preparations for the new survey are already underway, and municipalities are expected to send the first final property tax notices to owners at the beginning of next year. This will increase the pressure on communities to regain the lost planning security for owners and at the same time fill their budgets.

These structural changes in taxation and the handling of assessment rates will certainly lead to further exciting discussions in the halls of the town hall and among citizens. It remains to be seen how the municipalities will adapt to the new framework conditions in the coming months in order to meet financial requirements and not place an excessive burden on citizens. For further information on the revenue neutrality of the assessment rates, please refer to the website Property tax digital available.