Thuringia: Free State profits from increased real estate prices

Before the energy crisis, real estate prices in Germany only knew one direction: upwards.

Thuringia: Free State profits from increased real estate prices

Before the energy crisis, real estate prices in Germany only knew one direction: upwards. This also increased the state's income from the real estate transfer tax. But that will probably end soon.

Erfurt (dpa/th) - The real estate prices, which have also risen significantly in Thuringia in recent years, have recently massively increased the state's income from the real estate transfer tax. According to the Thuringian Ministry of Finance, the state received around 199 million euros in 2018, and this amounted to around 286 million euros in 2022. "The increase in income from the land transfer tax in recent years can be explained primarily by the increased purchase prices," said a spokeswoman for the ministry of the German Press Agency. In the years between 2018 and 2022, the state's income from the real estate transfer tax had increased steadily. Even the corona pandemic did not stop this development.

The real estate transfer tax is usually due when someone buys a property - regardless of whether this property is built on or not. In Thuringia, a rate of 6.5 percent of the purchase price applies to this tax. The federal states can set the amount of the real estate transfer tax themselves. The tax rate applicable in Thuringia is one of the highest nationwide. For comparison: In Bavaria, the real estate transfer tax rate is 3.5 percent.

According to the Ministry of Finance, the fact that it has recently become increasingly difficult for many people to buy land or real estate together with the land as a result of the energy crisis and rising building interest rates has not yet had a negative impact on the revenue from real estate transfer tax. "However, we assume that these developments will have an impact on the income from the real estate transfer tax in 2023," said Thuringia's Finance Minister Heike Taubert (SPD).

Based on the tax estimate from October 2022, according to the ministry, the state expects income of 264 million euros from the real estate transfer tax for 2023. "Due to the current framework conditions, I assume that in the current year both the number of transactions and the purchase prices will be below those of the previous year," said Taubert.

For the following years, her ministry expects tax revenue from real estate transfer tax to rise slightly again from the level of 2023. In 2024, the revenue should be 273 million euros. According to the forecast, this tax revenue will not be close to the 290 million euro mark again until 2027, as it was in 2022.