Delay in Property Tax Relief for Thuringia Residents, Says Left Faction
Property tax reductions may become a reality by 2026, according to the Link's assessment. - Property owners may anticipate a reduction in real estate taxes starting from 2026, a development that could potentially favour those on the left politically.
Get ready for the property tax relief to hit Thuringia in 2026, according to the opposition Left faction, bucking the announcement made by Finance Minister Katja Wolf (BSW). The faction has tabled a proposal in parliament that aims to hike the property tax rate by 50 percent, while municipalities are expected to establish two tax rates for property tax B, with non-residential properties not being taxed less than residential buildings, the budget spokesman Ronald Hande told the German Press Agency in Erfurt.
Hande says the intent is to create a fair distribution, benefiting tenants and homeowners while slightly increasing the burden on businesses. He pointed out that the property tax burden on residential buildings has noticeably increased, necessitating correction. The Left faction is optimistic that the authorities can carry out the necessary adjustments and recalculations by 2026, according to Hande.
The state government, consisting of CDU, BSW, and SPD, also plans to make changes to the property tax - a point agreed upon in the coalition agreement among the three parties. The topic will be discussed in the cabinet on Tuesday.
Thuringia initially adopted the federal model for calculating the property tax, as announced by Minister Wolf, which resulted in a tripling of the property tax for residential real estate while offering relief for commercial properties.
The anticipated recalculation, as per Wolf, should promote fairness. According to Wolf, the effort required by financial authorities and municipalities issuing the tax notices is considerable. In the state parliament, the minister stated that a switchover could only be possible from 2027 onwards.
- Property Tax Recalculation
- Relief
- Wolf
- Ronald Hande
- Erfurt
- Thuringia
- German Press Agency
Here's a snapshot of the current tax situation and the possible effects of the 2025 changes:
Current Tax Scenario
- Transfer Tax: The transfer tax rate in Thuringia stands at 6.5%.
- Annual Property Tax (Grundsteuer): Rates range from 0.26% to 1%, depending on local multipliers and can amount up to hundreds of euros per year for municipal fees.
Upcoming Changes (2025)
- New Assessments: Tax calculations will be based on new valuations, potentially triggering changes in tax amounts for both residential and non-residential properties.
- Impact on Residential Properties: Property owners may experience an increase in their annual property taxes due to higher assessed values, but this depends on local multipliers determined by municipalities.
- Impact on Non-Residential Properties: Similar changes can be expected for non-residential properties, potentially affecting businesses and commercial landlords.
In essence, local authorities' multipliers and the outcome of the new property valuations will primarily determine the effect on property taxes. Stay tuned for further updates in the coming months.
- Ronald Hande, the budget spokesman, suggests that Thuringia's municipalities should consider implementing a community policy that includes vocational training initiatives to manage potential financial challenges arising from property tax changes.
- If the property tax recalculation, as per Minister Wolf, does result in increased tax amounts for residential properties, personal-finance management techniques such as budgeting may become crucial for homeowners to handle these changes effectively.
