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DIW Chief Urges Higher Property Taxes, Faces CDU and Tenant Pushback

Fratzscher argues that taxing immovable real estate would help close an estimated €30 billion gap without triggering capital flight.

Overview

  • Marcel Fratzscher proposes a stronger, regularly updated property tax and taxation of real‑estate value gains as an alternative to a national wealth tax.
  • He cites international practice, noting countries like France, the UK and the US collect up to about 4% of GDP from real‑estate taxation compared with roughly 1% in Germany.
  • CDU politicians denounce the plan as penalizing homeowners who rely on property for retirement security.
  • Tenant advocates in North Rhine‑Westphalia warn that higher property taxes can be fully passed on to renters under current rules, while a homeowners’ group criticizes fairness and foresees higher municipal multipliers.
  • Commentary flags Germany’s already high ownership and transaction costs and floats alternatives such as targeted levies on very high‑value properties or a coordinated wealth tax, with no government decision yet.