Millions of households 'failed to submit German property tax declaration'
Half a year after the property tax deadline expired, German authorities have reported that millions of declarations are still missing.
When DPA conducted a survey of finance departments in each of Germany's 16 federal states, they discovered that around 10 percent of the property declarations that were meant to be submitted have still not been received by the tax offices.
In North Rhine-Westphalia alone, about 600,000 declarations are still missing, according to the regional tax office, while just over 90 percent have been received so far.
In Bavaria, about 500,000 returns are still missing, in Lower Saxony more than 200,000, in Thuringia almost 150,000, in Berlin about 90,000, in Saarland about 64,000 and in Mecklenburg-Western Pomerania almost 25,000.
Almost six months after the January 31st deadline, the submission is still hovering at around 90 percent, though Baden-Württemberg is slightly lower at 86 percent.
However, there have been inconsistencies in how this is recorded, with the city state of Hamburg at one point recording a submission rate of over 100 percent, which was attributed to households submitting multiple declarations.
The declaration is a key part of a project to overhaul and update Germany's property tax system. Thirty-six million households in Germany were originally supposed to submit the declaration in October last year, but this was subsequently extended to the end of January due to the sluggish submission rate.
READ ALSO: Why Germany's property tax reform is mired in chaos
The government has been criticised for the complexity of the declaration and for not providing enough support for property owners throughout the process. There have also been numerous technical issues with the online tax portal Elster due to the high volumes of traffic.
'No tax rises'
The decision to revamp Germany's property tax system came on the back on a court decision five years ago.
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unconstitutional, partly because the property values currently used to calculate what an owner owes are seriously out of date.
Currently, German property tax calculations are based on old valuations that haven’t been updated for over 50 years.
West German properties were last assessed for tax purposes in 1964, and East German ones in 1935.
The government intends to use the declarations to arrive at updated valuations, meaning that property tax amounts could end up increasing.
Flats near the Frauenkirche in Dresden. Photo: picture alliance/dpa | Sebastian Kahnert
However, the government has been keen to insist that property tax won't go up across the board and could even end up decreasing for some
Speaking to DPA on Friday, a German Association of Towns and Municipalities explained that the financial situation in many towns and municipalities was tight and that property tax is the main form of income for local governments.
READ ALSO: EXPLAINED: The German property tax declaration owners need to know about
"Therefore, it cannot be ruled out that municipalities might be forced to increase the property tax as well in order to achieve the prescribed budget balances and, incidentally, to be able to make the necessary expenditures and investments," she added.
However, the nationwide property tax revenue of currently around €15 billion per year should also apply from 2025 onwards - when the new tax rates will be brought in - so the tax won't go up overall, the spokeswoman emphasised.
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When DPA conducted a survey of finance departments in each of Germany's 16 federal states, they discovered that around 10 percent of the property declarations that were meant to be submitted have still not been received by the tax offices.
In North Rhine-Westphalia alone, about 600,000 declarations are still missing, according to the regional tax office, while just over 90 percent have been received so far.
In Bavaria, about 500,000 returns are still missing, in Lower Saxony more than 200,000, in Thuringia almost 150,000, in Berlin about 90,000, in Saarland about 64,000 and in Mecklenburg-Western Pomerania almost 25,000.
Almost six months after the January 31st deadline, the submission is still hovering at around 90 percent, though Baden-Württemberg is slightly lower at 86 percent.
However, there have been inconsistencies in how this is recorded, with the city state of Hamburg at one point recording a submission rate of over 100 percent, which was attributed to households submitting multiple declarations.
The declaration is a key part of a project to overhaul and update Germany's property tax system. Thirty-six million households in Germany were originally supposed to submit the declaration in October last year, but this was subsequently extended to the end of January due to the sluggish submission rate.
READ ALSO: Why Germany's property tax reform is mired in chaos
The government has been criticised for the complexity of the declaration and for not providing enough support for property owners throughout the process. There have also been numerous technical issues with the online tax portal Elster due to the high volumes of traffic.
'No tax rises'
The decision to revamp Germany's property tax system came on the back on a court decision five years ago.
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.
Currently, German property tax calculations are based on old valuations that haven’t been updated for over 50 years.
West German properties were last assessed for tax purposes in 1964, and East German ones in 1935.
The government intends to use the declarations to arrive at updated valuations, meaning that property tax amounts could end up increasing.
However, the government has been keen to insist that property tax won't go up across the board and could even end up decreasing for some
Speaking to DPA on Friday, a German Association of Towns and Municipalities explained that the financial situation in many towns and municipalities was tight and that property tax is the main form of income for local governments.
READ ALSO: EXPLAINED: The German property tax declaration owners need to know about
"Therefore, it cannot be ruled out that municipalities might be forced to increase the property tax as well in order to achieve the prescribed budget balances and, incidentally, to be able to make the necessary expenditures and investments," she added.
However, the nationwide property tax revenue of currently around €15 billion per year should also apply from 2025 onwards - when the new tax rates will be brought in - so the tax won't go up overall, the spokeswoman emphasised.
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