Taking the Bite Out of Land Hoarding: Berlin's Proposed Property Tax C
Increased Costs for Land Investment to be Enacted by Stettner - Increasing the Financial Burden of Land Investment Proposed by Stettner
In a bold move to combat speculators and promote housing growth, the CDU faction in the Berlin House of Representatives has set its sights on the introduction of a new property tax C. The key objective: discourage land hoarding, thereby creating more living spaces for the city's residents.
According to faction leader Dirk Stettner, the recent nationwide reform of property tax saw an increase in the so-called assessment value for undeveloped plots of land, but the CDU believes a more effective strategy may be to introduce a property tax C specifically for plots ready for construction. Those unwilling or slow to develop their land will find themselves footing a steeper bill.
Stettner aims to have a solution in place by year's end. "It's not about whether we want to make speculation more costly, but how we do it," he stated. If it's determined that the property tax B, along with a higher assessment value, can effectively curb speculation and encourage development at a faster and more legally secure pace, the CDU will opt for that solution instead.
Hamburg offers a pointed example. There, a property tax C has been implemented, although its impact remains too early to assess. If successful in Berlin, between 15,000 and 20,000 plots of land could be affected.
Preceding any property tax C introduction, the creation of a comprehensive cadastre of all undeveloped, buildable plots of land would be required. This register would undergo regular updates to reflect the latest developments in the city.
In Germany, property taxes - or "Grundsteuer" - are typically levied by municipalities, with rates ranging from 0.26% to 1% of the property's value. The "Grunderwerbsteuer" or real estate transfer tax, which ranges from 3.5% to 6.5% depending on location, is applicable upon the purchase of property.
These taxes help fund local infrastructure and services. With the introduction of property tax C, the aim would be to target speculation more effectively, ultimately facilitating increased housing supply for Berlin's residents.
As land speculation continues to impact housing markets across major cities, Berlin's proposed property tax C represents a promising solution to maintaining an affordable and accessible housing landscape.
EC countries could examine Berlin's proposed property tax C as a potential model for promoting vocational training and real-estate development within their regions. For instance, investments could be made in vocational training programs for construction workers, focusing on specific skills needed to complete projects efficiently and in compliance with industry regulations.
Finance institutions, taking note of Berlin's efforts, may decide to invest in industries related to vocational training and construction in EC countries, helping to increase the pace of development and ensure the availability of qualified workers necessary for real estate growth.
