Construction boss calls for tax cuts: This is how living in Germany becomes cheaper!

Construction boss calls for tax cuts: This is how living in Germany becomes cheaper!

In the L’Immo podcast, ZIA President Iris Schöberl recently discussed the challenges of housing construction in Germany. Schöberl pointed out that the state share of the costs for new housing in Germany is 37 percent, which significantly increases the production costs. She advocates innovative ideas and a fundamental reform in housing construction in order to promote it.

A central point in her argument is the property transfer tax, which she identifies as a significant cost factor. According to Schöberl, a reduction in the real estate transfer tax could not only reduce construction costs, but also lead to higher revenue for the federal states, as they benefit from 50 percent of the sales tax distribution.

High production costs in Germany

CBRE's analysis shows that the production costs for new apartments in German cities are on average 5,150 euros per square meter. Almost a third of the costs, around 1,500 euros, are taxes and public charges. This represents a significant cost disadvantage compared to other European countries. The production costs vary in France and Finland, where they are around 5,000 euros each, to significantly lower prices in Poland at 2,130 euros.

The cost structure for new apartments in Germany is made up of various factors. Land costs average 1,010 euros per square meter, which is lower than prices in France, where they are 2,400 euros in Paris. The additional construction costs in Germany, at 490 euros, are also higher than in the Netherlands (420 euros) and Poland (75 euros), which further increases the overall deficit.

Tax burdens and international comparisons

A particularly noteworthy aspect is the high proportion of state-induced costs in Germany. In addition to the real estate transfer tax, which varies depending on the federal state between 3.5 percent in Bavaria and 6.5 percent in North Rhine-Westphalia, other taxes are also important. In an international comparison, the share of this expenditure in the Netherlands is 35 percent, while other countries such as Sweden and France are around 20 percent and Austria even scores with only 7 percent.

Schöberl asks why Germany cannot learn from the successes in neighboring countries, where sales tax rates for residential real estate have already been reduced. These considerations are important in order to make apartments more affordable again and bring about a real turnaround in housing construction.

In summary, it is clear that the coming months could be decisive in initiating a change in German housing construction through tax relief and innovative approaches. It remains to be seen how policymakers will respond to these challenges.

For further information on this topic, readers should consult the analyses Haufe and CBRE consult.