But the law has not yet taken its final form. It has a clause that allows states (Bundesländer) within Germany to decide independently on how to calculate the tax. This can lead to different results for property owners and renters.

For example, federal states such as Bavaria and Saxony, being characterized by a more conservative electorate would prefer that the tax payment be left on tenants – since most of the sector has larger assets in their ownership, and they want to lower costs as much as possible. In contrast, the SPD / Linke / Grüne coalition would prefer to push for property tax to be cast on property owners to ease the tax burden on the weaker sections of the population.

In addition, the clause could lead to significant disparities between states – some of which could raise the tax rate twice as much in order to raise municipal revenue, creating disparity at the federal level. Experts argue that the state must maintain simplicity and a uniform taxation system. The land tax is the government’s third largest income section. And this is therefore of great importance, but it also needs an update that will be applied wisely and will do no harm to property owners or renters.