Thuringian Property Tax Reform: Balancing the Scales
Suggestion for a Legal Framework on the Unified Bovine and Calf Market Structure
June 20, 2025, 3:14 PM
Thuringia's ongoing property tax debate centers around the need for reform, addressing concerns of unfairness and excessive taxes. The tax, a longstanding source of income for cities and municipalities, is vital for funding essential services such as schools, kindergartens, and road maintenance.
However, post-nationwide reform, property tax has faced criticism from many owners as discriminatory or excessive. All parties concur that adjustments are necessary for the property tax reform.
Parliamentary Stance
In the Thuringian State Parliament, CDU, BSW, Left, and SPD factions have pushed for a state-level property tax reform, rejecting its abolition outright. The "Black-Red" coalition, comprising CDU, BSW, and SPD, has proposed amendments to redistribute the tax burden. Homeowners should see relief, while commercial property owners will shoulder more in the future. The aim is to maintain approximately the same revenue for municipalities, around 250 million euros.
The AfD faction suggests a federal council initiative aiming to abolish property tax, which one CDU budget politician, Ulrike Jary, labeled as a populist, short-term solution.
Video: State Government Presents Property Tax Reform
The "Black-Red" coalition has presented its draft bill for a property tax reform, aiming to ease the burden on residential properties, while the Left presents a fully developed bill.
(Watch the video for updates from Thuringia Journal)
Abolition of Property Tax: Consequences and Repercussions
Jary calculated that in 2023, property tax in Thuringia amounted to approximately 254 million euros. As such, she asserts that it is a crucial revenue source for municipalities. Abolition would significantly relieve large landowners and real estate speculators, who would have to face increased tax burdens elsewhere or reduced services in areas such as schools and kindergartens.
AfD MP Jan Abicht admitted that revenue losses would need to be offset. According to him, the federal government could address this through increased municipalities' shares of income tax.
Differing Rates for Residential and Non-Residential Properties
According to the Black-Red and Left factions' proposed reforms, municipalities will have the flexibility to set different tax rates for residential and non-residential properties, allowing them to better adapt to local particularities.
It's crucial to keep housing affordable.
The BSW MP Alexander Kästner highlighted that implementing relief measures by 2026 is unrealistic due to high conversion costs associated with updated IT systems.
The left budget politician Ronald Hande underscored the importance of developing unique Thuringian rules for property tax. The previous federal model has contributed to increased property taxes for residential buildings and unintentional decreases for commercial properties.
The Need for a Tax Policy Transformation
The AfD faction leader Björn Höcke criticized the nationwide property tax reform as bureaucratic, stating that Germany requires a tax policy breakthrough. In his opinion, there is no revenue problem in Thuringia and Germany; rather, the issue lies in spending excesses.
The proposed reforms from the traffic light coalition and the Left were referred to the budget and finance committee. An AfD motion failed to garner a majority in the state parliament.
On Property Tax in Thuringia
- Homeowners to be Relieved: The updated property tax regulation intends to ease the burden on homeowners while increasing it on commercial property owners.
- Smooth Transition: The anticipated conversion of information technology systems may necessitate a longer timeline before implementation.
- Regional Particularities: Municipalities will have the capacity to adjust tax rates based on local circumstances, anticipating varying regional challenges.
Thuringia Strives for a Fairer Property Tax System
As the discussion on property tax reform continues, the focus remains on achieving a fairer, more equitable system that responds to Thuringia's unique regional needs while preserving essential public services.
[1] Thuringia Property Tax Reform 2025: What You Need to Know, Thuringia Today (June 14, 2025)[3] The New Property Tax System in Germany: A Comprehensive Explainer, German Central Bank (January 1, 2025)[5] A Federal Perspective on the Property Tax Reform in 2025, Federal Ministry of Finance (May 1, 2025)
Homeowners will experience relief under the proposed property tax reform, while commercial property owners may shoulder more in the future. The aim is to maintain approximately the same revenue for municipalities, amounting to around 250 million euros.
In the proposed reforms, municipalities will have the flexibility to set different tax rates for residential and non-residential properties, allowing them to better adapt to local particularities and keep housing affordable.
