CDU Wants to Make Land Speculation Costly with Property Tax C
Increasing the financial burden on speculative land development projects proposed by Stettner - Increasing the Financial Burden of Land Investment Proposals by Stettner
In the Berlin House of Representatives, the CDU is advocating for accelerated apartment construction on available land and is considering introducing a new property tax C. Dirk Stettner, faction leader, shared with the German Press Agency that their aim is to combat speculation and bring land into use for housing.
Following the nationwide property tax reform, which took effect in January, Berlin had already increased the assessment value for undeveloped land (property tax B). The CDU is now determining whether property tax C for planning-ready, developable land is a more effective solution to encourage owners to construct quickly. Otherwise, they'll face increased expenses.
Speculation ought to be financially punishing
The CDU aims to complete these examinations by the end of the year, with Stettner adding, "We aren't discussing whether we want to make speculation more expensive, but how we accomplish that." Property tax C is one option, but if a more effective, quicker, and legally secure method is found through property tax B and a higher assessment value, they'll pursue that alternative. The examination of property tax C is also outlined in the coalition agreement between the CDU and SPD.
Looking to Hamburg
Stettner referred to Hamburg, where a property tax C has been implemented. However, its effects are not yet conclusive. Introducing a similar measure in Berlin could impact approximately 15,000 to 20,000 plots, according to Stettner's estimates.
A prerequisite for this would be creating a registry of all undeveloped, developable land, which would need regular updates. Exceptions could apply for formally developable land on which construction is not feasible due to various reasons.
Hamburg's Property Tax C: A Mixed Bag
Property taxes vary in Germany, with Berlin's and Hamburg's systems impacting land speculation and construction differently. While specific data on Hamburg's property tax C is scant, its effectiveness can be influenced by factors like tax rates and local policies.
Germany's Property Tax System and Land Speculation
Generally, property taxes in Germany are low — between 0.26% and 1% of the property's value[1] — which might not be enough to significantly curb land speculation alone. However, when combined with other policies, such as depreciation laws for rental properties, it can stimulate investment in housing[4].
A Well-Rounded Approach for Berlin
Berlin, like Hamburg, faces challenges in managing land speculation and promoting affordable housing. A property tax like Hamburg's could be considered, but its effectiveness would depend on the specific tax rate and the overall housing policy framework.
Key Considerations for Berlin:- Tax Rate: A higher tax rate could discourage speculation by increasing costs for speculators.- Depreciation Laws: Encouraging depreciation for energy-efficient buildings, as in other parts of Germany, could promote new construction[4].- Comprehensive Policy: The effectiveness of a property tax in Berlin would likely be enhanced when part of a broader policy package addressing affordability, supply, and demand in the housing market.
In conclusion, while specific data on Hamburg's property tax C is limited, a well-designed property tax combined with supportive housing policies could potentially address land speculation and promote housing construction in Berlin.
- Initiatives like the property tax C in Hamburg, as mentioned by Dirk Stettner, could be a potential solution to combat land speculation and encourage vocational training in housing construction in EC countries, provided the tax rate is appropriately set and the policy is part of a broader approach.
- Politically, the CDU's intent to examine property tax C for facilitate construction on available land also raises questions about business implications, with interest accruing from such tax measures potentially funding various vocational training programs to further bolster the housing sector.
