In view of the expected adoption of the property tax reform in the state parliament, business associations warn of rising costs for landlords, tenants and property owners.

According to the amendment to the law, the size of the property and the property as well as the location and use should have an impact on the tax level.

The property tax is one of the most important sources of income for the municipalities and has to be regulated anew across the whole of Germany.

Rainer Schulze

Editor in the Rhein-Main-Zeitung.

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The new regulation in Hesse is more practicable than the federal model, but still not objective enough, says the owners' association Haus & Grund.

"The area factor method developed by the Hessian finance minister is easier to use than the complicated model of the federal government," says managing director Younes Frank Ehrhardt.

"Its major disadvantage, however, is that it contains value-dependent components: when land values ​​rise, the property tax for tenants and owners automatically rises too."

In the Hessian cities and their surrounding communities, the land values ​​have risen particularly sharply in recent years because in many places not enough has been built.

With a pure area model - "the only really objective property tax model" - there would be no regular reassessment of the land and buildings.

No sign of relief for Hessen's economy

The amendment to the law should not change the property tax revenue for the respective municipalities.

Ehrhardt would like a state ordinance to protect low-income households in particular from increasing burdens: "Municipalities are not allowed to abuse the property tax reform as an additional source of income, that would drive up housing costs."

Christian Gastl, Vice President of the Hessian Chamber of Commerce and Industry, also criticizes the new model: "The state government is giving away a historic opportunity to significantly simplify property tax in Hesse."

With the introduction of the property tax C for plots ready for construction, the pressure is increasing.

“Companies are asked to pay when they make provisions for future growth of their business and have space ready for investments.

More effective than introducing the property tax C, which has already failed, would be to dismantle regulations, ”says Gastl.