German coalition to present bill on property tax reform
June 17, 2019
German lawmakers in the ruling coalition have settled a dispute over property tax reform. A bill is expected to be presented to parliament before the summer break.
Image: picture-alliance/dpa/C. Koenig
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Germany's grand coalition has reached an agreement regarding property tax reform, according to a joint statement from coalition leaders on Monday.
Lawmakers from Chancellor Angela Merkel's conservative Christian Democratic Union (CDU), its Christian Social Union (CSU) sister party and center-left coalition partner Social Democratic Party (SPD) had met for the first time since the resignation of former SPD leader Andrea Nahles.
The agreement on property tax reform came after a monthslong dispute. Finance Minister and SPD member Olaf Scholz had presented a value-based model for calculating property tax that would apply countrywide. But Bavarian and other CDU/CSU lawmakers wanted a system based on land area and demanded that the states have the right to deviate from federal requirements.
The details of the agreement have not been disclosed, but the document addresses "all substantial questions" in regards to property tax reform. The coalition intends to put the legislation up for debate in the German parliament before it goes on a summer break so the reforms can be implemented this year.
At 49.4%, Germany has the second highest tax rate among developed countries, according to data from the Organization for Economic Cooperation and Development (OECD). Property taxes make up around 2.7% of the tax share.
Property tax has been a hot button issue since Germany's constitutional court deemed the tax unconstitutional in 2018 because properties are taxed based on their value from the early 1960s (1930s in East Germany).
Merkel's coalition in doubt
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'Wall tax' up for discussion
Sunday's meeting, led by Merkel, was the first in which the SPD was represented by its interim leadership trio of Malu Dreyer, Manuela Schesig and Thorsten Schäfer-Gümbel.
The party's former leader, Andrea Nahles, stepped down at the beginning of June after the party suffered significant losses in May's European elections.
The coalition also reached agreements regarding the reduction of the country's so-called solidarity payment or "wall tax" — a surcharge originally introduced to finance costs caused by German reunification in 1990 after the Berlin Wall came down — as well as affordable housing and climate protection. Those pieces of legislation will be presented to the German parliament after its summer break.
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Image: Reuters/F. Bensch
Stephan Weil, premier of Lower Saxony
The 60-year-old leads a coalition of the SPD and the Christian Democrats in his northern state. In the Bundesrat — the council of Germany's 16 states and upper house of parliament — he serves on the Committee on Foreign Affairs and is deputy chairman of the Committee on European Affairs. Many in the SPD have long seen him as a possible new hope to lead the party forward.
Image: picture-alliance/dpa/C. Jaspersen
Manuela Schwesig, premier of Mecklenburg-Western Pomerania
Schwesig, born and raised in the former East Germany, is the first woman to lead the state of Mecklenburg-Western Pomerania. The 45-year-old previously served as minister of family affairs under Chancellor Angela Merkel, a role she used to push for equal opportunities for women and better state childcare facilities. She serves on the Bundesrat's Committee on Foreign Affairs.
Image: picture-alliance/dpa/K. Nietfeld
Olaf Scholz, finance minister and vice chancellor
Scholz, 60, is seen by some of his fellow party members as a technocrat and is considered to belong to the SPD's conservative wing. As finance minister under Merkel, he has been committed to curbing public spending and keeping a lid on new debt. He also served as federal minister of labor and social affairs in Merkel's Cabinet from 2007 to 2009.
Image: picture-alliance/dpa/K. Nietfeld
Malu Dreyer, premier of Rhineland-Palatinate
A reasonably popular figure in the SPD, Dreyer was voted in as deputy party chairwoman in 2017 with 97.5% backing. Despite repeatedly stating she would not want to leave her western state for Berlin, she is still seen as a possible replacement for Nahles. The 58-year-old has served as premier of Rhineland-Palatinate since 2013 and is the first woman to hold the office.
Image: Imago/J. Jeske
Rolf Mützenich
The 59-year-old Bundestag member from Cologne is one of the deputy chairs of the SPD's parliamentary group. In that role, he is responsible for foreign affairs, defense and human rights policy. He is well respected within the party and could be tapped as interim SPD leader in the Bundestag.
Image: picture-alliance/dpa/M.Kappeler
Achim Post, SPD leader in North Rhine-Westphalia
The 60-year-old sociologist leads the SPD in Germany's most populous state, North Rhine-Westphalia. He is a deputy chair of the SPD's parliamentary group, overseeing budgetary affairs, finance and Europe. As secretary-general of the Party of European Socialists, he is also considered well connected at the European level.
Image: picture-alliance/dpa/B. v.Jutrczenka
Martin Schulz, ex-SPD leader
The former president of the European Parliament has been suggested as another possible challenger. The 63-year-old ran as the SPD's candidate for chancellor in 2017 but lost to Merkel. He subsequently stepped down as SPD leader. He has already said he doesn't want the job back, but Germany's Bild am Sonntag newspaper reported last week that he was keen to lead the SPD parliamentary group.
