Commentary on property tax compromise: poor bavarians pay for rich ones

The dispute over property tax was silly because no tax increase was planned. Only millionaires benefit from Soder’s current arrangement.

Whether tenants in Munich or Villa Starnberger See – all Bavarians pay the same property tax Photo: dpa

The entire dispute about the property tax was completely silly. The CSU and businesses, in particular, spread the impression that the demise of Germany as a business location was imminent. But in fact, it was only about shifting 14 billion euros around a bit because the Federal Constitutional Court had rejected the old calculation method. No tax increase was planned.

One can live with the current compromise, because there will be no tax dumping. The "opening clause" will allow each federal state to decide for itself how it wants to structure its property tax. But "location competition" between the states has been prevented because the total property tax revenue in each state must remain as high as it has been up to now.

However, it is likely to be a bitter pill to swallow for the Bavarians, of all people. Prime Minister Soder may now be celebrating himself as a hero for having pushed through the opening clause for the states against "Berlin" and against SPD Finance Minister Scholz. But the Scholz model is much fairer than the Soder plan, which will apply in Bavaria in the future.

Scholz wanted to ensure that the property tax is calculated according to the current value of the land and buildings. So a villa owner on Lake Starnberg would have paid more than a homeowner in the outlying Upper Palatinate.

Soder’s model, on the other hand, stipulates that only the square meters should count. This means that the relatively poor people of Upper Palatinate will soon pay just as much property tax as the millionaires from Lake Starnberg.

This tax gift for the rich in Bavaria was cleverly dressed up by instrumentalizing the tenants. It is true that the property tax can be added to the rent. What is wrong is to pretend that every Bavarian is a poor tenant in Munich. There could have been other models to protect tenants in Munich. Under Soder, it is mainly the millionaires who benefit.