Germany's New Property Tax System Set to Begin in 2025

The reformed property tax aims to modernize calculations but could lead to significant cost changes for owners and renters.

The new property tax system, effective January 1, 2025, replaces outdated valuation data from 1964 in West Germany and 1935 in East Germany.
Property taxes will now be calculated based on land size, value, a statutory tax rate, and a municipality-determined multiplier.
The reform introduces the Grundsteuer C, allowing municipalities to impose higher taxes on undeveloped, buildable land to discourage speculation.
While the changes are intended to be revenue-neutral for municipalities overall, individual property owners may see significant increases or decreases in their taxes.
Renters could experience shifts in costs as landlords are permitted to pass property tax changes onto tenants, with potential impacts reflected in 2026 utility bills.