Property tax

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The property tax or property tax is a tax on the total assets of a taxpayer. Its basis of assessment usually includes net assets remaining after the deduction of the debt. It is just as much a property-related tax as a tax that does not affect the total assets, but only individual assets, for example the property tax.

On average, the output of capital-related taxes on GDP fluctuated between 1.7% and 2.3% between 1998 and 2018. During this time, Switzerland lowered its share, approaching the OECD average, while Germany and Austria were among the European OECD countries with the lowest share of asset-related taxes.

Historical development

Property taxes were already levied in antiquity, for example in the Roman Empire and in Athens; they served temporary purposes such as war financing. This continued into the modern era, so the Maria Theresia, beset by the Austrian War of Succession, raised a property tax several times in 1743, 1747 and 1748. In Germany, property tax-like levies were levied primarily on real estate until the late Middle Ages; These taxes were more in line with the current property tax. A property tax on total assets was first introduced in Germany in 1893 by the Prussian Supplementary Tax Act. At the end of the 2010s, the wealth tax was rated as a “phasing-out model”: among the 36 OECD countries, five had a personal wealth tax in 2017 (1990 there were still 12 states).

Property tax in Germany

In Germany, the actual property tax according to the current property tax law is a date-related property tax, which is calculated from the value of the taxpayer’s net assets (gross assets less debts). The tax base includes businesses, real estate, savings, securities and life insurance, and luxury and artistic objects. Taxable persons are both natural and legal persons. Natural persons receive in accordance with § 6 Abs. 1 VStG an allowance of 120,000 DM or the equivalent of around 61,355 euros.

The property tax was last levied in 1996; In that year, their volume was around 9 billion DM. The property tax was entitled to the federal states as state tax (para 2 no. 1 GG). In 1995, the Federal Constitutional Court ruled that a different tax burden on property and other assets with property tax was incompatible with the principle of equality (para 1 GG). In the deliberations on the Annual Tax Act 1997, the then Federal Government stated that there was no constitutional obligation to abolish the property tax, but since then the property tax is no longer levied with effect from 1997, although the property tax law is still in force.

In the 1920s, capital-related taxation was b