the question of which models will come for a Reform of the property tax in question, so far, essentially three models for discussion:
In the land value model is based primarily on the value of a property for the amount of the tax due.In the cost – value-model construction- or renovation costs for the houses on the property. This model was submitted to 2016, a majority of countries.The surface equivalence model especially in the pure area of land and buildings the basis for the amount of the Tax would be less of the value of the area and the real estate.Ifo experts recommend surfaces-model
The Munich-based Ifo-Institute has been very clear on Monday for the third variant. “This would have to value-based models offer considerable advantages. Tax simplification: We would avoid high evaluation costs,“ said ifo President Clemens Fuest on Monday in Berlin at the presentation of a study by the Institute on behalf of the associations of home & fundamental and Central real estate Committee.
a combination of real estate, residential and usable space. “For a one-off provision is sufficient. Adjustments would only be in the case of structural changes necessary,“ said Fuest.
value-based method for the determination of the basic produce of taxation is, however, considerable problems, says Fuest. Current traffic should be used for values, so this would have to be determined and updated again and again. “That would be associated with a considerable effort that could be due to the relatively low property tax revenue of about 14 billion euros in the year hardly justify,” says Fuest. The property would be set to values of flat-rate, would reduce the evaluation costs and also constitutional concerns. display
The note of the proponents of a value-based, that this is a fairer distribution of the tax burden could be achieved, reject the experts. “This Argument is not viable. The basic tax is a property tax. The economic capacity of taxpayers, and plays no role,“ says Fuest. This applies “regardless of whether the tax is based on the market value of the house or of the land and buildings area”.
tenants in the big cities would have to pay considerably more
In addition, value-based property tax models to a considerable redistribution of the tax burden. The owner of self-used real estate as tenants in big cities, would have expected to pay much more than in the past. “In big cities, the tax burden is through the land value tax for an average single-family house of around 5.5 – to 6.5-times as high as for an average apartment in a multi family house,” the authors write in the study.
The land and building face – based equivalence model, it is, however, a much more even distribution of the tax burden. PDF FOCUS-Online-Deal with world-save
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Kai Warnecke, President of the owners Association home & reason, Germany, for the surface-based approach. “The surface model is fair, because those who inhabited more space, pay more,” said Warnecke in Berlin. “The surface model provides to the citizens, the administration and the municipalities, reliability and predictability” said Warnecke. “The old tax model has failed because the policy has not been updated. This should not repeat itself.“
On the individual property tax burden, the municipality decides to end up with your rate. “The Reform of the property tax must allow the municipalities to their financial room for manoeuvre. You must not, however, invite you to fill the municipal coffers steadily, more and more,“ said Warnecke. Buy, Rent or Build? (Display), you can Find the property of your dreams
“The Federal constitutional court set a deadline for the application of the new basis of calculation is contrary to a value-based model. The idea of a value-based calculation basis up to 2025 apply, appears before the need 35 million plots of land as well as agricultural and forestry enterprises to re-evaluate, illusory,“ added Hans Volkert Volckens, Chairman of the ZIA Committee on tax law. “With the surface model the periods would be adhered to. The required data are available.“
another advantage would be, according to Volckens, in addition to the rapid implementation of these Reforms for the Taxpayer is much more transparent than a tax to a value and also for the municipality, a non-cyclical revenue source. Likewise, there is no automatic increase mechanism would be in the basis of assessment is implemented.
real estate tax municipalities brings in almost 14 billion euros per year
The study also shows that a value-based basic duty would lead to a model that is economically strong Federal States with high property prices such as Bavaria and Baden-Württemberg have to pay more in the countries financial compensation. The fair value model and the land value tax would lead to, among other things, the Northern Federal States of Bremen, lower Saxony, North Rhine-Westphalia and Schleswig-Holstein would be financially better off at the expense of other provinces. PDF protection against burglars
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According to the experts, the advocates and opponents of the individual reform models are the winners and losers in the framework of the financial equalisation among the States. With other words: the politicians who must decide on the Reform, it is less a viable solution, as much more a question of whether their province benefits from a model or not.
by the end of 2019 must have a new system
you must agree nevertheless, The Federal constitutional court had not classified the current assessment of the property tax not only as unconstitutional but also laid down that they must be regulated until the end of 2019 by the legislature.
After the business tax is a tax with an annual revenue of nearly 14 billion euros, the most important own source of revenue of cities and municipalities. On the Reform, the Minister of Finance of the Federation and the länder are currently advising. The background is that the unit values underlying the calculation have not been adjusted in decades. The judges complained that this violated the principle of equality.
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pom property tax, Ifo-Institut, Haus&Grund Reform