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There have been a number of occasions in recent years where IPTI has been undertaking international research in relation to property tax systems around the world. Each time we look at Germany, I am surprised that the tax base which supports the annual property tax system there is so out of date. I am also surprised that the burden of property taxes in Germany is so much lower than in many other developed countries. These two factors may well be related.
Looking initially at the burden of tax, the latest data (2016) published by the OECD shows that property taxes as a percentage of GDP in Germany amounted to 1.06%. This compares with 2.66% for the US, 3.78% for Canada, 4.10% for France and 4.19% for the UK. Looking at property taxes as a percentage of taxation in Germany, the data OECD shows it to be 2.83%. This compares with 9.05% for France, 10.23% for the US, 11.95% for Canada and 12.63% for the UK. It will be seen that, in comparison with the highest burden of property tax in the world (i.e. the UK), Germany’s property taxes are around 25% of that level.