Building land tax

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The land tax and property tax C was in the Federal Republic of Germany raised 1961 and 1962 severity of the property tax . It should serve to prevent land speculation and close building gaps . Even after its repeal, a new introduction as part of a reform of the property tax was discussed.

General

About property tax in Germany

In Germany, a distinction is made between real estate tax A (agricultural - for land used by agriculture and forestry ) and real estate tax B (structural - for land and buildings that have been developed or can be built on). The basis for calculating property tax is the unit value determined by the tax office . This is significantly lower for undeveloped land than for developed land.

The situation before the introduction of the building land tax

During the National Socialist era , a wage and price freeze was introduced in 1935 . This led to a build-up of inflation . After the Second World War , the social market economy was introduced in West Germany . The core of this policy was the release of wages and prices. However, the price for undeveloped land was excluded. These were still subject to the price freeze regulations of 1935. Since the economic miracle had led to strong new building activity, the price freeze led to a black market in building land . Owners of building land demanded and received an illegal surcharge on the official purchase price.

With the passing of the Federal Building Act (BBauG) by the Bundestag on June 23, 1960, the price control for undeveloped land was also supposed to fall (this was implemented on October 29, 1960 with the land price freeze cancellation regulation). The general expectation was that this price release would result in a sudden increase in land prices in the direction of black market prices. In order to mitigate this, a series of measures have been taken according to an expert report by the “Scientific Advisory Board for Questions on Soil Assessment at the Federal Ministry for Housing”. The newly created expert committees were supposed to create transparency about the land prices actually paid, the development contributions to be levied during the development and not just during construction, the municipalities' right of first refusal was strengthened and property tax C was introduced.

The building land tax of the 1960s

In 1960 the building land tax was introduced in Germany. The regulations were implemented in Section 172 of the Federal Building Act (BBauG) and Sections 12a to 12c, 21 Paragraph 3 GrStG old version .

The progressive staggered increase in property tax was intended to counteract the tendency of landowners who are not willing to build to withhold building-ready land from the market in the hope of later price increases, thereby eliminating an artificial shortage of supply.

The building land tax related to plots ready for building. For these, the tax index for undeveloped land, which at that time was 5 per thousand, was gradually increased. From January 1, 1961, the increased tax index for undeveloped, ready-to-build plots was 20 per thousand. After two calendar years it rose to 25 per mille and after two more calendar years to 30 per mille. The municipalities set a special rate (property tax C) for building land tax, which differs from the other rates. If the property was built on, the property tax was recalculated retrospectively in accordance with property tax B and the additional tax paid back.

The tax was controversial from the start. Due to the low level, the steering effect was disputed, the extensive exceptions (such as agricultural and commercial areas ready for building were excluded) and the possibility of obstruction by the municipalities by setting a low tax rate were suitable to let the tax fail. The German Taxpayers Association also spoke out against the tax.

On February 24, 1963, the FDP parliamentary group submitted an application to the Bundestag for the abolition of property tax C. On June 10, 1964, the German Bundestag abolished the tax with the “Law to Change Property Tax Regulations”. The reason was that the hoped-for effect of an increase in the property offer had not fulfilled. The building land tax was retroactively repealed from January 1, 1963, so that the building land tax was only levied for the years 1961 and 1962.

The building land tax was considered constitutional by the Federal Fiscal Court in a judgment of April 19, 1968.

Discussion about a new introduction

After real estate prices and rents rose more slowly than the inflation rate for 20 years , they rose above average in the 2010s. As a result of the refugee crisis in Germany from 2015 onwards , the number of people looking for accommodation rose sharply, and the European Central Bank's zero interest rate policy led to a sharp rise in rental yields. Since the middle of the decade rents and purchase prices have risen to such an extent that even the suspicion of an incipient real estate bubble has been discussed.

Against this background, the reintroduction of a property tax C has been discussed since 2016. According to a report by the Tagesspiegel from April 15, 2016, the Berlin Senator for Construction Andreas Geisel (SPD) called for the reintroduction of property tax C. The Greens in Baden-Württemberg took up this demand in 2016. So far there have been no concrete draft laws.

According to the ruling of the Federal Constitutional Court of April 10, 2018, the regulations on the uniform valuation for the assessment of property tax in the "old" federal states have been unconstitutional since the beginning of 2002. The legislature must adopt a new regulation by December 31, 2019 at the latest.

Web links

Individual evidence

  1. ^ A minister calls for a buyers strike; in: Die Zeit No. 09/1961 of February 24, 1961, online
  2. ↑ BGBl. 1960 I p. 341 , BStBl I 1960, 446
  3. ↑ Land Tax Act in the version of August 10, 1951 ( Federal Law Gazette I p. 519 ), amended by Section 172 BBauG of June 23, 1960 ( Federal Law Gazette I p. 341, 380 f.)
  4. ↑ § 12a GrStG old version
  5. ↑ Sigmund Chabrowski: The building land tax will hardly increase the supply of land; in: Die Zeit No. 08/60 of February 19, 1960, online
  6. ↑ Roland Schupp, Die Baulandsteuer, Juristische Rundschau 1964, Issue 2, pp. 41 - 45 (42).
  7. ↑ Az III .: R 78/67; on-line
  8. ↑ BVerfG, judgment of April 10, 2018 - 1 BvL 11/14 et al
  9. ↑ BVerfG, press release No. 21/2018 of April 10, 2018