Saxony-Anhalt's municipalities are worried about property tax revenue: red alert!

Saxony-Anhalt's municipalities are worried about property tax revenue: red alert!

The property tax reform is causing quite a stir in Saxony-Anhalt, as many municipalities are expecting falling income. A survey by MDR, which ran until June 30, 2025, shows that of the 218 municipalities surveyed, a whopping 142 responded. Over half of these communities fear a negative development of their financial resources, while a quarter even expect drastic losses. Municipal experts, including Bernward Küper from the Association of Cities and Municipalities, confirm the uncertainty: “Many municipalities will probably no longer achieve the previous income from property taxes,” he explains, adding that things could become critical for many municipalities as they are already struggling with financial deficits.

Since the beginning of the year, property tax has been levied on a new calculation basis, which has resulted in significant changes in the tax amounts. The aim of the reform was to achieve a fairer distribution of the tax burden among the owners; the old values ​​sometimes date back to the time before the Third Reich. However, the reform is not without its pitfalls: Preliminary figures from official cash statistics show that revenue from January to March 2025 fell in three quarters of municipalities compared to the same period last year. However, reliable statements about increased or decreased income can only be made in the first quarter of 2026.

Problematic implementation of the reform

It is essential for municipalities to adjust their assessment rates in a timely manner. Around a third of the municipalities have not yet tackled this because they are waiting for complete notifications from the tax offices. These assessment rates are crucial in order to compensate for any calculated losses. The deadline for adjusting the assessment rates was June 30th. This means that many cities still have some time to adapt to the new circumstances and implement the reform in a structured manner.

However, those affected by property taxes must also be aware that if they have any questions about the valuation of their properties, the so-called property tax value, they should contact the responsible tax office directly. The contact details can be found on the property tax assessment notices or online. If there are justified objections to the assessed property tax, objections can be filed within one month of the announcement of the decision, which is an important opportunity for many to have their voices heard.

Impact on society

The new property tax not only affects the owners directly, but can also be passed on to the tenants if necessary. The total income from property taxes plays a central role in financing municipal services such as schools, daycare centers and swimming pools. Over 15 billion euros annually end up in the coffers of cities and municipalities, and a decline in this income can have serious effects on the infrastructure and the quality of life of citizens.

Regarding the reform of the property tax, the Federal Ministry of Finance has made it clear that the levy on real estate, in particular land and buildings, is now based on new value standards. These changes became necessary due to a ruling by the Federal Constitutional Court in 2018, which criticized an unconstitutional assessment. As a result, higher assessment rates for undeveloped land will be possible from 2025 in order to counteract speculation.

The next steps in this topic will be crucial for the municipalities of Saxony-Anhalt. A comprehensive discussion about the various assessment rates and their effects can be expected in the coming months. The reform could therefore bring with it both opportunities and challenges that need to be overcome.

For more information about property tax reform and its impact on you, visit the Ministry of Finance Saxony-Anhalt or the FAQ page Federal Ministry of Finance.

Now it remains to be seen how the situation will develop and whether the municipalities will be able to overcome their financial challenges. In the meantime, citizens and property owners face the uncertain impact of this fundamental reform.