"Local German Property tax is a communal tax imposed by the local authority. Each location will apply their own rates. 2 types of local tax apply: 1) applicable on agricultural property and 2) applicable on commercial land & buildings. The Finance Authority calculate the tax using the unit value (einheitswert) which they calculate based on the assessed value of the property which is generally lower than the purchase price. Rate will depend on the location of the property. Rates range from 2.6% - 6% with the average for residential property standing at 3.5%. A multiplier is then applied to the % calculation. http://www.ptireturns.com/en/tax_info/de.php
(Still a little more complex than that... Annual Grundsteuer is calculated as the assessed value of the property (the "Einheitswert") on January 1st 1964 (!) multiplied by the "Grundsteuermesszahl" (2.6 ‰ for a single family house up to €38,346.89 Euro (75.000 DM) value, thereafter 3.5 ‰, 3.1 ‰ for double occupancy houses and 3.5 ‰ for everything else), multiplied by the "Hebesatze" - a multplicator determined by the local council.
Key to the calculation is the "Einheitswert" - which as it represents the notional value 46 years ago is way under the commercial value. As a very, very rough guide, and depending on the location, house prices have increased by a factor of 5 since then, so a €200,000 house now would be notionally valued at €40,000 for the purposes of Grundsteuer.
A local council migth determine a typical Hebesatz of 350%, so the calculation for a double occupancy house valued (in 1964!) at €40,000 would be: 40,000 x (3.1 / 1000) x (350 / 100) = €434 per year.
If you think this is cheap you have to ask what this tax contributes to. The answer is "not much" as the local councils reel in most of their income from a cut of income tax and locally generated business taxes. http://www.toytowngermany.com/lofi/index.php/t196372.html)
German Transfer Fees. The transfer of German real estate is subject to a real estate transfer tax (RETT) of 3.5 % on the purchase price of the property." http://www.ptireturns.com/en/tax_info/de.php
German Inheritance Tax (IHT) and gift tax are assessed on the basis of the taxable property with rates varying between 7% -50%. This is the amount by which the beneficiary is enriched and which is not subject to tax exemption. The value of each asset is determined in accordance with the Valuation Law. The rates of German IHT or gift tax vary and depend on the relationship between the donor and beneficiary and the value of the inheritance/gift.
"Local German Property tax is a communal tax imposed by the local authority. Each location will apply their own rates. 2 types of local tax apply: 1) applicable on agricultural property and 2) applicable on commercial land & buildings. The Finance Authority calculate the tax using the unit value (einheitswert) which they calculate based on the assessed value of the property which is generally lower than the purchase price. Rate will depend on the location of the property. Rates range from 2.6% - 6% with the average for residential property standing at 3.5%. A multiplier is then applied to the % calculation. http://www.ptireturns.com/en/tax_info/de.php
The website is wrong. The rates are 2.6promille-6promille and not 2.6prozent-6prozent. There is another tiny zero in the sign that didn't make it into the English version. It is however true that in some municipalities the local multiplier can be huge, so you need to watch out for that. I've seen cases where it comes to over 1% in the end.
For example in Nordrhein-Westfalen:
Quote:
The real property tax rate depends on the type of real property. The tax rate is e.g. 2.6‰ (0.26 percent) for property used for (semi-) detached houses with a value of up to EUR 60,000 and 3.5 ‰ (0.35 percent) for all remaining types of real property (including commercially used real property).
But in NRW the multiplier can be as high as 350, which would give you a 1.25% property tax on the *whole value* not just on the unimproved land value. That would make it about equal to the top marginal rate in Victoria, applying to the whole amount (i.e. not progressive).
But of course to the investor, it is not a cost because the final renter pays it in most cases. (i.e. the person who actually lives there).
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Everyone pays the land tax in Germany, not just investors.
Well, actually everyone except investors pay the land tax. Because if you rent a place you agree to pay the land tax.
Think of German land tax as like a very expensive rates. And the rental agreements are like Australian commercial rental agreements (where the renter has to pay the taxes and renovations, etc.)
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
The website is wrong. The rates are 2.6promille-6promille and not 2.6prozent-6prozent. There is another tiny zero in the sign that didn't make it into the English version. It is however true that in some municipalities the local multiplier can be huge, so you need to watch out for that. I've seen cases where it comes to over 1% in the end.
For example in Nordrhein-Westfalen:
But in NRW the multiplier can be as high as 350, which would give you a 1.25% property tax on the *whole value* not just on the unimproved land value. That would make it about equal to the top marginal rate in Victoria, applying to the whole amount (i.e. not progressive).
But of course to the investor, it is not a cost because the final renter pays it in most cases. (i.e. the person who actually lives there).
I personally suspect there were probably quite a few very good reasons the Bubblepedia site died once 'Demografix' got the run of it.
Herbs, you are smoking your name again. Nothing to do with BP in all the comments in this thread.
I think that he is referring to the way that you "lie down upon a thread" and post a reply to everything that is said, and rely heavily on very suspect research.
Any expressed market opinion is my own and is not to be taken as financial advice
I think that he is referring to the way that you "lie down upon a thread" and post a reply to everything that is said, and rely heavily on very suspect research.
Thanks for the clarification of what exactly, your opinion?
Back to the pig pen....
So Germany has anti-speculation measures and taxes in place that have kept a lid on house prices, to the advantage of their productive assets.
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