A comprehensive property tax reform will come into force in 2025, which will bring far-reaching financial changes for owners and tenants. The reform became necessary after the Federal Constitutional Court declared the previous calculation basis to be outdated and unconstitutional in 2018. As some of the previous values were based on valuation standards from 1964, and in West Germany even from 1935, a new model was developed to better reflect actual market values.
In Baden-Württemberg, and therefore also in Karlsruhe, the so-called land value model applies, which uses the land value and land area as the basis for calculation and largely disregards the type of development. This will lead to considerable tax increases, particularly in urban regions with high land values. In Karlsruhe, it is expected that owners of residential properties, particularly those with larger plots, will have to pay significantly more property tax from 2025. Commercial properties, on the other hand, are to be relieved by around 9 million euros, which will lead to an additional burden for private households.
Criticism of the Karlsruhe assessment rate and the reform
Friedemann Kalmbach, local councillor of FÜR Karlsruhe, criticizes the reform: “While small homeowners with large properties are heavily burdened, large commercial properties are relieved.
“This law is unfair and one-sided in this form,” criticizes Kalmbach and criticizes the lack of support from the city administration for private property owners.
“It is particularly disappointing that the city did not take legal action against the reform. In my opinion, Karlsruhe would have had the opportunity to challenge the model, as it unfairly shifts the tax burden onto private owners and favors commercial properties. We need a fairer tax policy that takes into account the financial realities of citizens. In times of rising living costs, this additional burden hits many citizens particularly hard,” he emphasizes and calls on the city of Karlsruhe to have more courage to fight for a balanced distribution of the tax burden.
Consequences for owners and tenants in Karlsruhe
The reform will lead to a significant increase in the tax burden for many private owners. As property tax is generally passed on to tenants, they will also have to expect higher service charges from 2025. The taxpayers’ association advises citizens and property owners to inform themselves at an early stage and examine possible savings on operating costs.
For many Karlsruhe residents, the reform will mean a significant additional financial burden. Kalmbach appeals to citizens to be aware of the reform and its effects and calls on the city to examine measures to distribute the burden more fairly.
