Mayor Georg Hoffmann (standing from right) welcomed the numerous listeners to the information event about the property tax reform. Photo: Randolf Alesch
An information event by the municipality of Bodenwöhr on the topic of property tax reform, which is currently hotly debated in all municipalities, was unexpectedly well received. Mayor Georg Hoffmann was able to welcome around 70 interested parties, including some local councilors, to the brewery vault of the Gasthof Jacob. No wonder, because everyone is actually affected by the property tax reform, not just the property owner, but also the “real estateless” tenant, since the property tax is usually passed on to them in the form of operating costs.
Property tax reform should be “revenue neutral”.
In his introductory remarks, Hoffmann reported that a ruling by the Federal Constitutional Court in 2018 called on the legislature to re-regulate the calculation of property tax in order to ensure more fairness and simplify the valuation process. The reform should be “revenue neutral,” meaning that the municipality’s annual property tax revenue should not increase overall, but that does not mean that there will be no changes for individuals. At the end of 2021, the Bavarian state parliament decided on a purely area model that involves significantly less administrative effort than the federal model.
Previously unequal property tax for the same property
Thomas Brückner from the municipality’s tax office explained that older properties currently have to pay significantly less property tax than newer ones, even though the size and development status are the same. The area model chosen by Bavaria is based only on the size of the property and the living space as well as value-independent equivalence figures, but not on the value of the property. This means that if the value of the property increases, there is no need to recalculate it, which is seen as a great advantage and simplifies administration. The assessment basis is determined once and only needs to be adjusted if the size of the area or the use of the building changes. This means that the corresponding equivalence number, EUR 0.04/sqm for land and EUR 0.50/sqm for living space, is multiplied by the respective area and the property tax number (100% for land and 70% for living space) is applied to the result . (see calculation example below). The clerk responsible for property tax at the municipality, Ella Kretz, said that the property tax base amount calculated and approved by the tax office, multiplied by the assessment rate set by the municipality, would result in the amount of the annual property tax, which is to be paid in four installments. Objections to the property tax assessment amount can only be lodged with the tax office that issued the relevant notice and not with the municipality. The municipality is bound to the property tax assessment amount. Treasurer Thomas Forster announced that the assessment rate in Bodenwöhr was the same for both property tax A (Aused graphically) as well as in B (Bnormally used) is 300%. While the income from property tax A (approx. 33,500 EUR) is slowly decreasing due to the decreasing agricultural land, it is increasing for B (approx. 348,000 EUR) as a result of constant development.
The assessment rate should be reduced to 200%
It is difficult for the municipality to predict a “revenue-neutral” assessment rate, since only around 80% of the tax office’s property tax assessment amounts are available and around 20% of these are likely to be incorrect. When asked, Forster said that the administration was suggesting to the local council that the assessment rate be reduced from the previous 300% to the new 200%. According to Hoffmann, it remains to be seen whether the required “revenue neutrality” can be achieved. We assume that we will have to readjust again. A factor that is still incalculable to date is the leveling rate of 310% set by law, from which the district levy to be paid for property tax is calculated. If this is retained, the assessment rate will have to be reconsidered with regard to “revenue neutrality”.
