In Germany, municipalities are increasingly raising property tax rates, with 53% of them setting rates at 400% or higher last year, compared to just 5% in 2005. This trend is driven by financial pressures on local governments, which rely on property taxes to fund public services like roads and theaters.

The upcoming property tax reform, set for 2025, aims to address constitutional issues with the current system, but many municipalities are preemptively increasing rates.

This has led to a significant rise in the average tax rate, which reached 409% last year, marking the largest increase since 2005. The financial strain on municipalities, exacerbated by economic challenges, is likely to continue pushing rates higher, despite efforts to avoid additional burdens on citizens.

Only a small fraction of municipalities, 0.4%, have reduced their rates, highlighting the widespread trend of tax hikes.