Land Value Tax in Baden-Württemberg

As a federal republic Germany has national taxes and state taxes and at the beginning of 2025 Baden-Württemberg introduced Land Value Tax as a state tax to replace its existing property taxes.

Find out more:

• Please click here for a video with slides.

  The first half of the video has slides so you can fast forward and stop when the slide changes. - this is much quicker than watching the whole thing!

• Please click here for an article about the changes.

• Please click here to visit the Baden-Württemberg tax office web page (in English).

• Please click here for articles written by Dirk Löhr who has been very active to proposing LVT in Germany. Windows users can click right on any article in German to translate into English.

Note: we welcome information from anyone who knows more about LVT in Baden-Württemberg and who can provide feedback - especially about the public reaction.

Comments

• Property owners must submit a Property Tax Return.

• The proposal provides exceptions: dwellings, social housing etc.

• The proposal permits supplements - an idea we strongly support.

• The proposal talks about shifting the “burden” of tax onto commerce and industry. Given the disastrous effect on its industry of Germany refusing to accept cheap gas from Russia, this may not be the best time to add more costs to business!

• There does not seem to have been any phasing-in period to allow the market to adjust.

• There do not seem to be any mitigating proposals for those who will faced increased charges.

• The method of valuation seems fairly vague.

Differences from the UK proposal

We are fortunate in the UK in having long established bodies who can do the work of preparing for LVT: the Valuation Office Agency (VOI) and the Land Registry (HMLR) . We also have the Ordnance Survey (OS) that will provide the mapping data to create cadastral maps.

With our proposal:

• No Property Tax Returns are required. HMRC will have all the information necessary to raise the annual LVT bill.

• There are no exceptions. It is a flat basic rate across the country.

• It does not confuse spending with taxation as discussed here.

• National supplements can be applied and will reduce the basic rate.

• LVT is paid by freeholder recorded by HMLR, not by tenants.

• We do not see LVT as a “burden” but as a “contribution to the social good”. We believe that business should be encouraged, not discouraged - despite what Boris Johnson said about business.

• LVT will be phased in over 10 years to allow people and the market to adjust.

• The tiny minority that may not be able to pay any increase over LVT can defer payment of the balance until the property is sold or transferred.

• Our valuation proposal is very specific and would be done by the VOI which has been doing the job for over 100 years.