The principle is simple: Anyone who owns a property must pay property tax. Whoever lives to rent is usually asked to pay for this by their landlord. The property tax can be different.
The auditing and consulting company Ernst & Young (EY) has published an analysis of the development of property tax B and trade tax rates in all German municipalities between 2005 and 2019. This shows, among other things, in which federal states and which municipalities the property tax is highest on average.
Hardly anyone is exempt from property tax
Three factors are used to calculate the property tax: the unit value, the property tax index and the rate of assessment. In addition, a distinction is made between the assessment rate A for agriculture and forestry operations and the assessment rate B, which is payable by house and apartment owners, but also by tenants. Because whoever rents out his property on the property usually transfers the property tax to the tenants via the ancillary costs. According to the EY, this means that almost every citizen is affected by property tax B. Either as a homeowner or through the ancillary rental costs.
Differences between individual federal states
As the study published by EY shows, 38 percent of all German municipalities have increased their property tax assessment rate within the last five years. In the last analysis last year, this value was 58 percent. At the same time, in the course of the current analysis, the nationwide average property tax assessment rate was corrected upwards by 2 points to 380 points. On average, the burden of property tax per capita in Germany is 151 euros, according to EY in the study.
Apart from the city states of Bremen, Hamburg and Berlin, where both property taxes were applied, the per capita property tax burden is highest in North Rhine-Westphalia. At an average of 210 euros, this is almost 60 euros above the national average. Hessen follows in second place, whose average tax burden made the biggest jump of all compared to the previous year – from 183 euros to 192 euros. Third place goes to Lower Saxony with around 176 euros per inhabitant.
The results of the study also show that the tax burden in the east and south of Germany is significantly lower. In Brandenburg, a resident paid an average of 107 euros, in Bavaria 138 euros and, as an eastern German state with the highest tax burden, 123 euros.
These cities have the highest property tax
The analysis also shows that in 2019, 13 municipalities nationwide with a property tax assessment rate of 0 points did not levy any assessment rate. Most of them, however, were very small communities, seven of which are in Rhineland-Palatinate, five in Schleswig-Holstein and one in Baden-Württemberg.
The three highest property tax assessment rates were all collected by municipalities in Hesse: Lautertal with 1050 points, followed by Offenbach am Main with 995 points and Nauheim with 960 points. Of the 50 German municipalities with the highest assessment rates, 34 are in North Rhine-Westphalia, 15 in Hesse and one in Baden-Württemberg.
The large cities, which include municipalities with more than 100,000 inhabitants, with the highest assessment rates called were, apart from Offenbach am Main, Mühlheim an der Ruhr and Duisburg. In 2018, residents of Duisburg paid an average of 267 euros in property tax.
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