Rates of assessment in Saxony - hardly any additional burden from property tax

Despite nationwide debates about rising property tax burdens, the reform in Saxony has not resulted in a hidden tax increase on average. This is the result of an analysis by the Ifo Institute in Dresden. According to the analysis, most municipalities kept their political promise of revenue-neutral implementation at the turn of the year.

The cash revenue from property tax for developed and undeveloped land (property tax B) remained largely stable in most municipalities in the first half of 2025. "Despite some deviations, the overall picture for Saxony is largely revenue-neutral," said Ifo researcher Selina Schulze Spüntrup. Most municipalities have adjusted their collection rates so that the total revenue remains constant. Although there are some municipalities with significantly higher revenues, in other municipalities revenues have actually fallen.

Land capital with loss of revenue

A look at the data evaluated by Ifo shows that the majority of municipalities actually recorded largely constant revenues. Most municipalities appear gray in the institute's statistics - they are therefore in the neutral range of plus/minus ten percent. It is striking that the state capital Dresden is one of the municipalities with a significant decline, while Leipzig is in the neutral range. In total, 100 municipalities achieved higher revenues than before, while 40 recorded a decline. According to Ifo, there is no regional pattern.

On behalf of the Ministry of Finance, Ifo Dresden had calculated bandwidth-based, revenue-neutral assessment rates for the Free State of Saxony in 2024. According to the information, the collection rates that have now been set are predominantly within this range, although some municipalities have used the upper end. Municipalities with significant increases in revenue often deviated upwards from the recommended collection rates. Of the 45 municipalities with a revenue increase of over 20 percent, 37 have set collection rates above the revenue-neutral range.

Federal court confirms controversial model

The effects of the reform continue to cause debate throughout Germany. It was only on Wednesday that the Federal Fiscal Court declared the federal model to be constitutional and approved the use of flat-rate average values for the valuation of properties. Whether the reform will actually be revenue-neutral overall will only become clear once the full revenues for 2024 and 2025 are available.