Reform's Impact on a Cooperative Due to Changes in Land Tax
In the heart of Karlsruhe, Germany, the cooperative housing model known as Gardenstadt eG, is grappling with the consequences of a recent property tax reform. The reform, which has affected multi-family homes across the region, has led to a substantial increase in the property tax burden for row house tenants in Gardenstadt eG.
The reform, which considers only plot size, land value, and the municipal surcharge, has resulted in an average additional burden of 107% for properties in Baden-Württemberg, making it one of the highest increases in any federal state. In Gardenstadt eG specifically, the property tax liability has increased from 274,000 euros to a staggering 642,000 euros.
For a row house tenant with 70 square meters of living space and 280 square meters of plot, the property tax burden has risen from 36 euros to a hefty 426 euros. This significant increase has raised concerns among tenants, particularly as the land value in the Karlsruhe Garden Cities is between 650 and 820 euros per square meter after the revaluation.
The increase in the property tax burden is not unique to Gardenstadt eG. In Berlin, the property tax increase is even higher at almost 117%, while in the southwest, multi-family homes have an average increase of 81%. The national average property tax increase is 84.5%.
However, the impact of the reform on Gardenstadt eG and its tenants is still not fully understood due to a lack of specific data and case studies. General knowledge suggests that reforms that involve reassessing land values often influence the tax burden distribution between property owners and tenants. If the increased property taxes on landowners like Gardenstadt eG are passed on to tenants, they may face higher rents or service charges.
The president of the Association of Baden-Württemberg Housing and Real Estate Companies (VBW), Peter Bresinski, has stated that they have not conducted a survey among member companies on the impact of the reform. Jürgen Schmidt, from the Karlsruhe Garden City Cooperative, can be contacted for further information at 0711 66601-147 or via email at j.schmidt@our website.
Individual appraisals for some plots have already been commissioned by the Karlsruhe Garden City Cooperative, with the aim of reviewing the land value assessments and potentially minimizing the tax burden. The cooperative, like many others, is navigating the complexities of the reform, seeking to balance fiscal needs with the protection of affordable housing tenants from disproportionate rent increases.
While the exact implications of the reform for Gardenstadt eG and its tenants remain unclear, the case underscores the importance of understanding the impact of property tax reforms on urban housing models and the people they serve. Further research and consultation with relevant authorities and cooperative officials are necessary to gain a comprehensive understanding of the situation.
- The property tax reform, which primarily focuses on plot size, land value, and municipal surcharge, has not only affected multi-family homes in Gardenstadt eG but also other municipalities across Germany, with Gardenstadt eG experiencing a significant increase in property tax liability from 274,000 euros to 642,000 euros.
- Facing a potential increase in rents or service charges due to the property tax reform, the president of the Association of Baden-Württemberg Housing and Real Estate Companies (VBW), Peter Bresinski, could play a crucial role in understanding the impact of the reform on urban housing models, especially affordable housing like Gardenstadt eG, by conducting a survey among member companies.
