Berlin's Property Tax Reform Maintains Revenue Neutrality Despite Varied Impacts

The 2025 reform, mandated by a constitutional ruling, updates property valuations and tax rates without increasing overall tax revenue.

Berlin's property tax reform, implemented in 2025, ensures the city collects approximately the same revenue as before, with 2024 revenues at €870.5 million and 2025 projections at €885.8 million.
The reform was necessitated by a 2018 Federal Constitutional Court ruling, which deemed the previous system unconstitutional due to outdated property valuations.
The new calculation method emphasizes current property and land values, leading to significant tax shifts across districts, with some seeing increases and others decreases.
Approximately 868,000 tax notices have been issued, with 2,000 objections filed and 200 hardship applications submitted for owner-occupied homes facing steep tax hikes.
Berlin's model includes a reduced multiplier and adjusted rates favoring residential properties, while the financial administration plans to evaluate its outcomes and compare it with other states' approaches.