Impact of Land Tax Reform on a Cooperative: An Examination
Property Tax Reform in Baden-Württemberg Affects Tenants in Karlsruhe Garden Cities
The property tax reform introduced in 2025 has significant implications for property owners and tenants in row houses, such as those in the Karlsruhe Garden Cities. The reform, which bases property tax on updated land values, could lead to increased rent for tenants if property owners pass on higher tax costs.
The reform in Baden-Württemberg replaces the federal Property Tax Act with a new one, emphasizing the land value assessment as the tax base. This change can lead to altered tax burdens depending on how land values in specific areas like the Karlsruhe Garden Cities are assessed.
To minimize the tax burden, particularly for tenants or property owners concerned about inflated assessments, it is advisable to check land value assessments carefully, engage in the assessment review process, and seek advice from municipal or state resources.
The Karlsruhe Garden City Cooperative, Gardenstadt eG, has already experienced a significant increase in property tax liability due to the reform. Last year, their property tax liability was 274,000 euros, but it would now be 642,000 euros. For a cooperative member living in a row house with 70 square meters of living space and 280 square meters of plot, the property tax burden increases from 36 euros to 426 euros.
Individual appraisals for some plots have already been commissioned, as stated by Christoph Walter. Jürgen Schmidt can be contacted at j.schmidt@our website for more information.
It's important to note that there is no specific detailed information available about the impact on tenants in Karlsruhe Garden Cities itself. However, given the general approach to property tax in Baden-Württemberg and the reform's focus on land values, the indirect impact on tenants through cost adjustments in rents is a reasonable conclusion.
The Association of Baden-Württemberg Housing and Real Estate Companies (VBW) sees the effects of the property tax reform as calm. However, there has been no survey among member companies on how the reform affects them, according to VBW President Peter Bresinski.
The property tax model in Baden-Württemberg, which only considers plot, land value, and municipal surcharge, has led to a significant increase in property tax. The federal average for property tax increase is 84.5%, with Baden-Württemberg having an average additional property tax burden of 107%, the highest among all federal states, and Berlin having an even higher burden of almost 117%.
A survey by the publisher of the tax software Wiso, based on 46,000 real tax cases nationwide, shows that there are significant additional burdens, especially in multi-family homes. An average increase of 81% was determined for the southwest, while it is 121% for single-family homes.
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Businesses and municipalities in Baden-Württemberg may need to reevaluate their investments in real-estate, as the property tax reform could lead to increased property tax liabilities and subsequent rental costs for tenants. It's essential for property owners and tenants to carefully review land value assessments and seek advice from municipal or state resources to minimize potential increased tax burdens.
