In Baden-Württemberg, there is no minimum tax rate for property ownership.
In the state of Baden-Württemberg, the issue of property tax thresholds has been a topic of contention for both affected parties and the Federation of Taxpayers. For years, they have voiced concerns that the costs associated with sending property tax notices may outweigh the revenue generated, particularly for small property owners.
This discrepancy is evident when comparing a garden owner in the state capital, who might pay around 10 cents in four installments annually, to a small property owner in the Northern Black Forest, who could pay roughly five euros. However, the costs of administering property tax can vary significantly from one municipality to another.
Despite these concerns, there is no uniform threshold for property tax across the state. Instead, each municipality sets its own value or income limit to decide when the administrative cost of collecting property tax exceeds the amount receivable, potentially leading to a waiver or non-enforcement of the tax.
The exact number of negligible cases in Baden-Württemberg remains unknown, as no specific figures or standardized thresholds for waiving property tax were found in the search results.
In the recent conciliation talks between the state government and municipalities, it was agreed that waiving assessments of amounts under ten euros is only possible if the collection is uneconomical, as per the Municipal Budget Ordinance (§33). However, the situation remains unclear for taxpayers regarding the specific thresholds for waiving property tax in different municipalities.
The property tax reform in Baden-Württemberg has raised questions about why municipalities cannot waive tax for properties with negligible taxable amounts. City treasurers can no longer rely on legal constraints to collect small amounts of property tax, according to Eike Müller, the state chairman of the Federation of Taxpayers Baden-Württemberg.
Müller believes that if the effort is higher than the yield, it is no longer a tax collection, but a waste of tax money. He concludes that property tax notices with claims of less than 1 euro can be considered a thing of the past.
However, the Ministry of Finance has confirmed its previous legal opinion that a state regulation would interfere with municipal self-government rights and could lead to equalization claims. As a result, cities and municipalities in Baden-Württemberg may define the threshold for waiving property tax very differently due to varying costs and transparency.
The boundary between economic and uneconomic collection of property tax depends on the costs of processing in the respective municipality. The transparency of these administrative costs in cities and municipalities is uncertain.
After a long-standing dispute, the Ministry of Finance, Association of Municipalities and Cities, Municipal Audit Office, and Ministry of the Interior have agreed on a common interpretation of the relevant laws. According to this agreement, municipalities in Baden-Württemberg can waive property tax amounts exceeding 25 euros if the costs of assessment and collection are disproportionate to the amount, as per the Tax Code (§156).
This conclusion underscores the need for clearer guidelines and standardization in property tax thresholds across Baden-Württemberg to ensure fairness and transparency for all taxpayers.
- The ongoing property tax reform in Baden-Württemberg has prompted discussions within the industry, particularly in the sphere of finance, about the need for standardized property tax thresholds across municipalities, ensuring fairness and transparency for all business entities and taxpayers.
- The varying thresholds for waiving property tax among municipalities in Baden-Württemberg, as a result of their differing administrative costs, can make it challenging for some businesses, especially small property owners, to predict and manage their financial obligations accurately.
