In order to fill their coffers, numerous municipalities and municipalities in Germany have again increased the basic and business taxes in the past year. However, it is not as many as in previous years. Depending on the region, the increases are also different, according to a recent analysis by the consulting firm Ernst & Young (EY). EY evaluated data from the Federal Statistical Office from 2005 to 2018.
While in Saarland, for example, more than every second municipality raised the property tax in 2018, in Bavaria it was not even every twentieth. The trade tax increased almost 40 percent of the municipalities in the Saarland, in Bavaria, however, only a good 3 percent. According to the study conducted in 2018, land tax in Germany went up in just under eleven percent of the cities and municipalities, and business tax in good eight percent. Both were reduced in only 0.5 percent of all municipalities.
Basic and trade tax are very important sources of revenue for cities and municipalities and can be set by themselves through the so-called levy rates. Companies have to pay trade tax - their amount is also considered an important location factor. The property tax - in this case the property tax B - is levied on developed and buildable land and paid by the owners or allocated to the tenants. How it will be calculated in future, however, has to be re-regulated according to a ruling of the Federal Constitutional Court.
More than every second municipality has increased the property tax in recent years. Nationwide, 58 percent set up the levy rate. He averaged 378 points in 2018, while in 2013 he was still 351 points. The bandwidth is still very large. It ranges in land tax from a tax rate of 0 in various communities up to 1050 in Hesse Lautertal in the Odenwald. According to the study, the highest tax level is still North Rhine-Westphalia. Schleswig-Holstein has the lowest average property taxes on average.
Tax increases were needed less often
On the other hand, companies pay the least on average in Brandenburg. The proportion of municipalities raising their rates of levy has been steadily declining for several years, with both tax types. "The good economy has led in recent years to a financial relief of the municipalities and falling debts," says EY expert Bernhard Lorentz. "This reduced the pressure to act in some municipalities, tax increases were rarely needed." Relatively many property tax increases were in 2018 except in the Saarland in Mecklenburg-Western Pomerania (30 percent) and Lower Saxony (19), rather few, however, except in Bavaria in Thuringia (5) and Baden-Württemberg (8).
In terms of trade tax, Mecklenburg-Western Pomerania (23 percent) and Lower Saxony (18) were also at the top of the list, while Bavaria (3) and again Baden-Württemberg (5) joined the other end of the scale. For the municipalities, who knew how to help each other, the increase in taxes was a double-edged sword, said Lorentz. "Many highly indebted communities in structurally weak regions have in recent years, nothing left but turning the massive part on the taxation screw, in order to even have the chance of a balanced budget," he said. "However, it also reduced the attractiveness of the community for citizens and businesses."