Regensburg's property tax reform: assessment rate adjustment for 2025 decided

Regensburg's property tax reform: assessment rate adjustment for 2025 decided

The Federal Constitutional Court decided in April 2018 that the property tax is no longer constitutional due to outdated standard values. The transition period for the new regulation ends on December 31, 2024.

New property tax statute

The city treasury submits a new property tax statute to the city council. The adjusted assessment rates are intended to ensure the revenue neutrality desired by the federal and state governments. It is proposed to the city council to set the assessment rate for property tax A unchanged at 295 percent. The assessment rate for property tax B is to be increased from 395 percent to 510 percent. This tax is an important source of income for the city of Regensburg. In 2024, the city will collect around 30 million euros from property taxes.

Area model in Bavaria

The Free State of Bavaria has adopted a regulation for property tax B that deviates from federal law. According to the area model, the land and building areas are used as the sole basis for assessment. The value of the land no longer plays a role. The determination of property tax should be easier and more understandable for citizens.

Impact in Regensburg

For many citizens there will be a change compared to the current property tax burden. This is due to the new model. Some will have to pay more, others less - depending on the land and building area. So that the municipalities do not have less money at their disposal after the reform, the assessment rate must be adjusted. The assessment rate is a factor in determining the amount of individual property tax. According to the measurement amounts communicated by the tax office and applying the currently valid assessment rate of 395 percent, Regensburg would have a shortfall in property tax B revenue of around 4.5 million euros. In order to compensate for this deficit, the property tax statute submitted to the city council provides for a tax rate of 510 percent.

Distribution across the two most important divisions

In Bavaria, only one assessment rate can be legally set for all types of property for property tax B. With an assessment rate of 510 percent, the single-family house/condominium sector in Regensburg is relieved overall. “This was particularly important to me,” he saidMayor Gertrud Maltz-Schwarzfischer, “so that the majority of tenants are not burdened excessively.” In contrast, there is an overall increase in commercial real estate. However, with a tax rate of 510 percent, Regensburg remains well below the future average tax rate of comparable cities. “I see this as a clear commitment to our companies in Regensburg: We are limiting the burden to a necessary minimum,” saysCity Treasurer Georg Barfußclear and adds: “The still valid option of offsetting property tax amounts against other types of taxes such as trade tax offers further opportunities for reductions for companies.”

Development since 2003

The last adjustment of property taxes A and B in Regensburg dates back to 2003. Since then, the consumer price index has risen by 50 percent and personnel and social expenses by over 200 percent. With the property tax B rate of 395 percent, which has remained unchanged for over 20 years, Regensburg is well below the average for large cities in Bavaria, which is 495 percent. In the future, Regensburg will continue to be far from the average with a tax rate of 510 percent, which will be around 620 percent from 2025. “In the current budget situation, we cannot do without money,” emphasizeMayorandChamberlainin unison, “a assessment rate of 510 percent is therefore necessary.”

Dispatch of notices

The actual amount of property tax to be paid can be found in the individual property tax assessment. The city of Regensburg is expected to send out around 65,000 property tax notices from November 2024. The basis for the notices is the information provided by the taxpayer to the tax office and the assessment rate of the respective municipality.

schedule

The Finance Committee of the Regensburg City Council will discuss the proposal for resetting the property tax rates in a public meeting on October 24, 2024 from 3 p.m. The proposal will then be presented to the city council for a decision at its meeting on October 24, 2024 from 5 p.m.