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Government to pump billions into electric cars

The German government is planning to give a massive financial boost to the research and development of electric cars, aiming to have 1 million on the road by 2020.

Government to pump billions into electric cars
Photo: DPA

In the next two years alone, the German government plans to invest €1 billion in electric car research, the Welt am Sonntag newspaper reported on Sunday.

The plans include tax breaks for motorists with battery-driven cars, as well as “non-monetary” incentives like exclusive lanes and car-parks.

The German cabinet is to discuss the plans this Wednesday, and a government source told the newspaper, “There will be a very quick decision on the state support.”

Germany’s National Platform for Electromobility (NPE), in conjunction with various industry associations and Chancellor Angela Merkel’s office, is to deliver its final report on Monday. This is expected to provide a clear timetable and a cost analysis for the introduction of electric cars in the country.

The government’s target is to introduce a million battery-driven cars to Germany’s roads by 2020.

The auto industry has said it is prepared to cover the majority of costs, but there has been harsh criticism of the use of taxpayer’s money.

“I don’t think it’s a good idea when the state chooses some new technology that it happens to think is important, and then starts subsidizing certain products or technologies,” said Wolfgang Franz, chairman of the German Council of Economic Experts.

The Local/bk

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PROPERTY

EXPLAINED: The German property tax declaration owners need to know about

Property owners in Germany will have to send the tax office an updated declaration of their property values this year, to help calculate a new amount they’ll have to pay in tax. We explain what they’ll have to do.

EXPLAINED: The German property tax declaration owners need to know about

People owning property in Germany, from individuals who might own their home to commercial landlords, may have recently come across advisories from tax consultants or media stories, telling them they’ll have to submit a new declaration to the tax office as to their property’s value.

Interactions with German bureaucracy – especially the tax office – can be intimidating, but there’s a few easy steps to follow if you have to declare.

Who has to declare, when – and why?

In 2018, Germany’s highest court declared the country’s current laws on property tax (known as Grundsteuer) unconstitutional, partly because the property values currently used to calculate what an owner owes are seriously out of date.

West German properties were last assessed for tax purposes in 1964, and East German ones in 1935.

The constitutional court gave the government until the end of 2019 to come up with a new way of calculating the tax for Germany’s 36 million properties.

That’s why owners are being asked to send in new declarations, based on values as of January 1st 2022.

The tax office will then use those declarations to determine what new tax rates owners will have to pay for their properties. Although they may end up having to bear some of costs of higher property tax later, tenants don’t have to declare anything – just owners.

Owners have between July 1st and October 31st of this year to send in updated information electronically to the tax office.

READ ALSO: Update: What you need to know about the German property tax reform that affects us all

What information do I need?

Each of Germany’s 16 federal states are allowed to have slightly different regulations in the property tax reform, so be sure to check what specific regulation governs you. That said, a few key documents will help you to provide an updated property value to submit.

Extract from the land register (Grundbuchauszug): For people who purchased their property prior to January 1st 2022, this may be the best option to get the most up to date valuation possible that the tax office will accept. The federal government’s dedicated website on the updated property tax declaration also strongly recommends you have this document in particular. You can get this record by making an appointment with your land registry office, or Grundbuchamt. Each individual district, or Bezirk, will have one. You often have to make appointments with them beforehand to request documents, so call them up or email them to request a time.

Last assessment notice (Einheitswertbescheid), purchase contract, or construction documents: A few other documents, particularly for more recent purchases, will help you fill in the declaration. Construction documents may have been included with your purchase contract, and your local tax office will have sent you an assessment notice after you took possession of your property.

These documents will help you answer a few key questions on the electronic declaration, including what year the property was built, its size, number of parking spaces or renovation year. All of these will end up being relevant for the final declaration.

When will the new rate come into effect?

Tax experts say it may take until late 2024 for the new rates to be calculated. The federal government will decide on a base before each individual state may adjust their rate slightly through state law. That’s why it might take some time to tell owners what their new rates will be, with them expected to come into effect on 1 January 2025.

Until that date, owners can continue paying what they are currently paying with no changes.

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