From an international
perspective, German property tax reform offers an interesting field of research, as several models now exist in parallel. The
spectrum ranges from a tax based on the area (square metres) of the
whole property, with a higher weighting on the building (Bavaria), to a tax on
land value only (Baden-Wuerttemberg).
These two extreme cases are examined with regard to their expected effects on
settlement development and planning goals. The
comparison is made within a framework of a simple centre-peripheryscheme and completed by a burden shift calculation.
With some exceptions, the results indicate that the inclusion of the building and a minor role of the land value
in the tax base (Bavarian model) are not supportive of more compact forms of settlement, yet cause rising housing costs and lead to
more inefficient use of land. The
distributional effects also tend to be regressive with regard to the location of the property. Thus, the
Bavarian model tends to run counter
to important planning objectives. With regard to the criteria presented, the Baden-Wuerttemberg model works in the opposite direction. The other models applied in Germany are between these two poles.
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