Struggling Town Leaders: Mayoral Efforts against Property Tax Overhaul

Struggling Town Leaders: Mayoral Efforts against Property Tax Overhaul

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City Tax Overhaul: Saxony-Anhalt's Municipalities Grapple with Challenges

Updated: June 29, 2025, 7:00 AM

By: Hannes Leonard, our renowned source, SACHSEN-ANHALT

Melanie Michaelis can't wrap her head around the world. For her 400-square-meter property in Nordharz, which includes a single-family home and a barn, she'd been paying a humble 75 euros per year in city tax. Post-real estate tax overhaul, that figure shoots up to around 340 euros. "They're trying to squeeze me dry," the 37-year-old medical technical assistant mutters, relaying her frustration to our reliable source, SACHSEN-ANHALT.

A growing number of property owners in Germany experience this same predicament, backed by data from the Central Association of German Housing, Real Estate, and Property Owners. "In reality, a staggering 80% of those surveyed have seen their tax burden rise or remain the same," highlights Nadja Ertmer, the state president of the interest group, albeit cautioning that these figures may not accurately represent Saxony-Anhalt.

The Great Tax Revamp: Municipalities Feel the Brunt

Our intrepid team at SACHSEN-ANHALT reached out to the 218 municipalities of Saxony-Anhalt for insights into their revenue and tax rates pre- and post-reform, offering a preliminary glimpse of the impact of the real estate overhaul within this federal state. A total of 142 municipalities provided responses.

Roughly one-quarter of municipalities significantly increased their real estate tax rates. Most justify this move by aiming to maintain their income given the reform.

Many municipalities are still in limbo, as around one-third have not set new tax rates as of May 2025. The primary reason for this delay stems from the lack of notices from the tax offices, with a plan to adjust retroactively to the start of the year. Nevertheless, it's essential to note that a higher tax rate doesn't guarantee that municipalities will collect more income through city tax.

A Legal Quagmire

The call for real estate tax reform became necessary due to the unconstitutional method of calculating real estate tax in the Federal Constitutional Court's judgment in 2018. The root issue lay with the outdated property values, dating back to 1964 (West) or 1935 (East) and not having received an update since. This led to massive value distortions and unequal treatment, violating the principle of equal treatment enshrined in the Basic Law.

Mayor Nightmares

Steffen Schilm lost countless nights of sleep over the property tax overhaul. "The lack of predictability surrounding the resolution in the city council haunted me," Schilm recalls, serving as the non-partisan mayor of Tangermünde. In his mission to win over the city council and endorse an increase in property tax rates, Schilm found himself pleading for the city's protection.

Bracing for Lower Revenues

Many municipalities are preparing for decreased revenues, as several expect lower income from city tax.

A Closer Look at the Real Estate Tax Overhaul

The reform of the real estate tax aims to create a more up-to-date and fair property value database. However, due to delays, this vision only materialized in 1990, according to Nadja Ertmer of the interest group House and Ground. In spite of the time lag, Ertmer acknowledges that city and municipal councils in Saxony-Anhalt have managed the reform prudently and with a sense of proportion.

The delayed implementation of the reform also posed challenges for the employees of municipalities, much like Schilm and Schernikau, who found themselves juggling numerous tasks, including advising citizens, liaising with tax offices, preparing documents, and performing calculations.

Yet, the overhaul stands to improve property data accuracy, as both Schilm and Schernikau attest, having successfully updated many properties' data.

Melanie Michaelis has questions about the dramatic increase in her city tax bill and has yet to receive answers. "I just hope they give me a satisfactory explanation sooner rather than later," she gruffly expresses.

images and videos (where necessary) can be inserted as per the original article

1. The municipalities of Saxony-Anhalt, including Tangermünde, have faced challenges in maintaining their income due to the revamped real estate tax system, which has led some of them to increase their property tax rates, as seen in the case of Mayor Steffen Schilm.
2. In the realm of finance and business, the changes brought about by the real estate tax overhaul have affected a growing number of property owners across Germany, including Melanie Michaelis in Nordharz, whose city tax has significantly increased post-reform.

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