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Property tax reform: Municipalities have to set new assessment rates by summer
Current recommendations on new assessment rates by summer for property tax reform. Municipalities receive individual adjustment recommendations. The decision on assessment rates lies with local parliaments. Get insights into the new regulations.
Property tax reform: Municipalities have to set new assessment rates by summer
The new legal regulation of property tax will come into force next year. The Hersfeld-Rotenburg tax office has already sent notifications of the new property tax assessment amounts for 94.2 percent of the economic units in the district, including developed and undeveloped properties as well as agricultural and forestry operations. This rate corresponds to the Hessian average. Even properties for which an appraisal was required because there was no declaration of ownership are included.
In the entire state of Hesse, 9.9 percent of the notices were met with objections. The property tax reform should be revenue-neutral for municipalities, which means that the total annual property tax should neither increase nor decrease. By mid-2024, the tax administration will send individual recommendations for adjusting the assessment rates to all cities and municipalities. These recommendations are also published online.
There will be a comparison of the volume of the new measurement amounts with the old values as of January 1, 2022, in order to support the municipalities in determining the new assessment rates. The final decision on the specific assessment rate then rests with the respective local parliament. The reform may affect the properties, so it is important to inform the owners as early as possible about a possible change in the level of taxes.
The previous calculation of property tax was classified by the Federal Constitutional Court as unconstitutional because it inadequately reflected the actual value development of land and real estate. The property tax reform will be implemented from 2025, which should ensure a contemporary calculation. This step is intended to ensure that property tax becomes fairer and more transparent.
These recommendations on new assessment rates by the summer are crucial for the future tax landscape in municipalities and will give citizens a better idea of how the reform will affect their individual taxes.