Residents of Filderstadt face potential tax hikes
In the German town of Filderstadt, local authorities are taking steps to address a significant decline in revenues from property and business taxes. The proposed countermeasures involve adjusting the municipal tax rates upwards, with plans to increase the property tax (Grundsteuer) and business tax (Gewerbesteuer) rates.
This strategy, common among German municipalities, allows for some autonomy in setting tax multipliers on property and business taxes, within limits set by federal and state law. By increasing these multipliers, Filderstadt aims to generate additional revenues necessary to offset the reduction in revenue caused by economic downturns or reassessments of property values and business earnings.
The exact percentage increases in tax rates have not been disclosed, but it is clear that tax rates will be adjusted upward to address the financial situation arising from decreased tax revenues. If more detailed data or official municipal plans become available, they would provide clearer quantification of these adjustments.
The city is currently facing a deficit of over 15 million euros. The business tax, which has a tax rate of 395% since 1997, is not expected to reach the planned amount, and no improvement is expected in the long term. The revenue for the business tax is around 4.3 million euros less than the planned amount by early June.
For property tax, the revenue from Property Tax A, with a tax rate of 390% since 2016, is 67,282 euros less than the planned amount for this year. For Property Tax B, with a tax rate of 195% since this year, the revenue is more than 86,000 euros less than the planned amount.
Finance Officer Georg Braunmueller predicts a possible significant wave of objections for the property tax. Much is still uncertain about the property tax in Filderstadt, with many main assessments for the property tax yet to be issued. The revenue for the property tax A is expected to remain far below the planned amount, with an expected achievement of 25 to 30 percent.
The city council has the final say on the tax rate adjustments. The finance department will present proposals for tax rate adjustments for both property and business tax to the city council, effective from 2026. The introduction of the property tax C is not being discussed in Filderstadt at this time.
The municipal councils have received the official confirmation of lower tax revenues from the latest meeting of the administrative committee. The citizens and businesses of Filderstadt are bracing for these tax increases as the city works to stabilize its finances and navigate these challenging economic times.
The city council will present proposals for adjusting the property tax and business tax rates, aiming to generate sufficient revenues to offset the financial deficit arising from decreased tax revenues. The increased tax multipliers on property and business taxes, within the limits set by federal and state law, are expected to result in significant tax rate increases that the citizens and businesses of Filderstadt need to prepare for.
