Property tax reform: Municipalities report decline in revenue!

Property tax reform: Municipalities report decline in revenue!

In the last few months there has been a lot to report about the property tax reform in Germany. Announced as revenue-neutral, the latest figures from the Federal Ministry of Finance show that municipalities are far from achieving the additional revenue they had hoped for. Across all German municipalities, cities and municipalities generated property tax revenue of almost 7.7 billion euros from January to June 2025. A look at the figures for 2023, which ended with 15.5 billion euros, shows that income has fallen compared to the previous year, when the municipalities still received 16.1 billion euros. A bitter setback for many municipal funds!

The reform, which ultimately became necessary after the Federal Constitutional Court declared the old regulation unconstitutional in 2018, aimed to reassess around 36 million properties. It became clear early on that the tax calculation varies depending on the federal state. While the majority uses the federal model, Bavaria, Baden-Württemberg and Hesse have enacted their own laws. star reports that, as a result of this reform, many municipalities adjusted their assessment rates, but, according to the Taxpayers' Association, many owners are encouraged to object to property tax assessments. They fear that the reform will lead to a high additional burden.

The look into the future

With the valuation date of January 1st of each year, it is clear that the quarterly tax amounts due in 2025 will no longer change. This is not without a certain irony, as the then Finance Minister Olaf Scholz (SPD) had assured that tax revenue would not increase. The promptness with which the reform had to be implemented meant that many municipalities were stuck with the income. And while the figures for the first half of 2025 show a rather stagnating picture, associations have already filed model lawsuits to take action against the reform.

Another topic that has come to the forefront in the media in recent days is the various desired markets. So while we're talking about money, we can't help but mention the continued popularity of station wagons across countries, especially the Czech Republic. Despite a continuing trend towards SUVs, the Škoda Octavia remains one of the most sought-after models. Consumers are particularly looking for station wagons that are reliable, offer sufficient space, have moderate fuel consumption and are attractive in design. Models such as the Hyundai i30, Kia Ceed and Renault Megane, which are very popular in domestic automobile exports, are also recommended. No matter where you look, there is a good deal and great deals.

The discussion about property tax reform continues to contribute significantly to the concerns and considerations of property owners and municipalities alike. The fundamental changes still bring us numerous challenges, but also an opportunity to create a new, fairer system.