Stuttgart. In the canon of demands from the Baden-Württemberg construction industry to stimulate housing construction, the reduction in property transfer tax comes immediately after the increase in subsidies. The state government has now complied with this in the draft budget. It seems doubtful whether anything will change with regard to property transfer tax given the strained budget situation. If the tax rate were halved, the loss of income would amount to almost half a billion euros, as the German Economic Institute has calculated for the Southwest Industry Association and others. The country probably can’t afford that.
Higher tax rate for more expensive properties
It is legitimate that the construction industry still insists on the demand because it sees it as a lever to activate private capital for housing construction. But it might have been even more clever to modify the requirement. The real estate economists she commissioned provided the template. They believe that making the tax rate more flexible, as applies in Great Britain, is a better solution. There is a lower tax rate for inexpensive properties and a higher tax rate for more expensive properties. This not only makes it easier for people with little equity to own their own home and thus stimulates new construction, but also limits tax losses. This eliminates one of the country’s main arguments for leaving everything as it is when it comes to taxes.
