Germany's 2025 Property Tax Reform Faces Delays and Disputes

As the new tax system approaches, uneven implementation and rising costs spark concerns for property owners and municipalities.

The 2025 property tax reform, mandated to address outdated valuation methods, is causing widespread uncertainty as many municipalities have yet to issue updated tax assessments.
Property owners are advised by the homeowners' association Haus & Grund to withhold payments if they have not received new tax notices, citing the old system's unconstitutionality.
The reform aims for revenue neutrality overall, but uneven impacts are expected, with private homeowners potentially facing higher costs while some commercial properties may see reductions.
Municipalities are struggling to finalize new tax rates, with some opting to increase rates significantly to maintain revenues, while others delay adjustments to avoid backlash.
Critics highlight administrative challenges, a lack of transparency, and fears of legal disputes, as political debates continue over fairness and the reform's implementation.