Surging Municipal Revenues from Property Tax in Germany
Baden-Württemberg Leads with a 20% Increase
In the past decade, German municipalities have experienced a significant increase in property tax revenue, with Baden-Württemberg leading the charge. According to the Federal Statistical Office in Wiesbaden, the southwestern state saw a 19.88% rise in property tax revenue between 2013 and 2023, reaching €1.960 billion in 2023. This marks a notable increase from the €1.635 billion collected in 2013.
National Surge: 25% Rise in Property Tax Revenue
Nationally, Germany’s property tax revenue climbed by 25.2% over the same period, reaching €15.5 billion in 2023. This vital revenue stream accounts for a substantial portion of municipal income in Germany, with property taxes contributing €8.0 billion during the first half of 2024 alone, a 2.9% increase from 2023.
Property Tax Distribution
In the first half of 2024, Type B property tax on developed or undeveloped land accounted for the majority of revenues, amounting to €7.8 billion. Type A property tax, levied on agricultural and forestry assets, contributed a smaller share.
New Regulations and Challenges
Since 2025, new rules and property tax rates have come into effect, following a mandate from the Federal Constitutional Court. Previously, tax authorities relied on outdated data from 1935 (East Germany) and 1964 (West Germany) to determine property values.
Baden-Württemberg’s Bodenwertmodell
Baden-Württemberg employs the Bodenwertmodell (land value model), which bases property tax assessments on land area rather than the structures it accommodates. This has drawn criticism from homeowners, who argue that the model unfairly values garden space at the same rate as built-up areas.
Legal Challenges to the Bodenwertmodell
Eike Möller, head of the Baden-Württemberg chapter of the Bund der Steuerzahler (Taxpayers’ Association), has expressed his concerns about the Bodenwertmodell, stating that it leads to unconstitutional disparities. As a result, Möller and other organizations are pursuing several test cases against the new state property tax.
