Germany's New Property Tax Reform Sparks Mixed Reactions

The overhaul, mandated by a 2018 court ruling, shifts tax burdens unevenly across property owners, with significant regional differences.

The reform stems from a 2018 ruling by Germany's Constitutional Court, which deemed the old property tax system unconstitutional due to outdated valuation methods from 1964 in the West and 1935 in the East.
Bavaria has implemented a unique area-based model, unlike most other states, which use value-based calculations; this has led to varying impacts on tax amounts for property owners.
While the reform aims to be revenue-neutral overall, many municipalities are adjusting tax rates, potentially increasing the financial burden for some property owners.
Hamburg's government has pledged to adjust tax rates later in 2025 if revenues exceed the intended neutral threshold, but concerns persist about rising costs for homeowners.
Over 600,000 appeals against new tax assessments have been filed nationwide, highlighting confusion and dissatisfaction with the reform's implementation.