CDU in Berlin Wants to Make Land Speculation Costly and Boost Housing Construction
Increased Costs for Land Investment Proposed by Stettner - Intend to Enhance Land Investment Costs for Stettner
The ruling CDU faction in Berlin’s parliament is pushing for a speedier construction of homes on devolopable land. They're mulling over the introduction of a new property tax "C", aiming to clamp down on speculation. Faction leader Dirk Stettner told the German Press Agency: "We want to discourage speculation. Our aim is to get developable land into use and create housing."
As part of a nationwide property tax reform, Berlin had already jacked up the so-called base value for undeveloped land (property tax "B") in January. Stettner notes that the faction is exploring whether a new property tax "C" for planning-ready, developable land could be a more efficient means to encourage owners to start building promptly. If they don't, they'll pay a heavy price.
Stettner states that the investigations should be completed by the end of the year. "We're not discussing whether we should make speculation more expensive, but how we can do it," he said. "The property tax 'C' is one option." However, if it's found that existing property tax "B" and a higher base value can produce the same results more effectively, quickly, and securely, that path will be pursued instead. The examination of a property tax "C" is also outlined in the coalition agreement between the CDU and SPD.
Stettner pointed to Hamburg, where a property tax "C" has been enacted. It's still too early to gauge its impact. In Berlin, a property tax "C" could affect between 15,000 to 20,000 plots of land, estimates Stettner.
To implement a property tax "C", a cadastre of all undeveloped, developable land would be required, he adds. This database would need to be periodically updated. Exceptions would likely occur for formally developable land on which construction isn't feasible for various reasons.
Aiming High: Preventing Speculation and Creating Housing
As complex as real estate policies can be, the key objective remains unchanged: discouraging speculation and promoting housing construction. Strategies to achieve this goal involve taxation and incentives, strong regulatory frameworks, and supply-side policies, among others.
In Berlin, rent control measures help stabilize housing costs, while city regulations guide land use and encourage housing construction. Hamburg provides an example of a municipality employing a property tax "C" to tackle speculation. However, the impact of this strategy is still yet to be fully assessed.
As we navigate the dynamic real estate landscape, finding the right balance between encouraging housing construction and constraining speculation is vital. Policymakers must scrutinize various options and choose the most effective strategies, forging a path that fosters housing and discourages speculation in a fair and impactful manner.
Investing in vocational training for construction workers could be a strategic move for EC countries, as it may swiftly increase their capacity to construct more homes and combat land speculation, contributing to more affordable housing. Moreover, by exploring ways to finance the implementation of a property tax "C" for planning-ready, developable land, EC countries can find creative ways to invest in the real-estate sector, making it less appealing for speculative activities.
