Olaf Scholz: Bavaria rejects planned reform of property tax

Finance Minister Olaf Scholz is drafting a bill for the new land tax. Bayern wants a completely different model.


Bavaria is blocking a reform of the land tax, making it a case for the leaders of the grand coalition. Although the countries commissioned Federal Finance Minister Olaf Scholz (SPD) to prepare a bill. Bavaria Finance Minister Albert Fuecker (CSU) but said: "In the now planned embodiment, the reform model for Bavaria is by no means approved."

The state government wants a completely different model of property tax. The tax base should be based on the area. The Bavarian finance minister criticized, even among constitutional lawyers is disputed whether the Basic Law for the proposed Scholz proposal must not be changed. Unfortunately, Scholz continues to show no willingness to go in the direction demanded by Bavaria. Even the modifications now discussed would not have brought the necessary breakthrough. "The exorbitant bureaucracy outgrowths are barely contained, and there can still be no question of a simple reform concept that is easy to understand for the landowners," said Füracker.

Scholz, however, spoke after new consultations of a "major milestone" and an important step forward. In addition to the Federal Council, the Bundestag must approve a reform. The CSU plays therefore as a member of the black-red coalition a significant role in the reform of the property tax.

Land tax brings municipalities 14 billion euros

The leaders of the coalition want to meet in the chancellery for consultations. That they agree on a reform of the property tax is considered unlikely. The property tax is one of the most important sources of municipal revenue, with revenues of around 14 billion euros per year. The Federal Constitutional Court had demanded a new regulation until the end of 2019 because of completely outdated tax bases.

The finance ministers of the federal and state governments were in favor of Scholz's proposal for a bill. Simplifications were planned that led to the land tax being levied unbureaucratically in the future and also being social and fair. The basis for the bill is a model that provides for significant changes to the previous plans. However, the core is still a so-called value-dependent model. Property values ​​and the age of buildings should be used.

Recently, the German Tenants' Association had interfered in the discussion and warned of possible effects on the rental prices.

REF: https://www.zeit.de/wirtschaft/2019-03/olaf-scholz-grundsteuer-reform-ablehnung-bayern