Tax Burden Rises: Taxpayers' Association Says Many Municipalities Are Tightening the Tax Screw

Residents and businesses in Hesse, Germany, are facing a significant increase in their tax burden, according to an analysis by the Taxpayers' Association. The annual survey of all 421 Hessian cities and municipalities reveals a widespread trend of rising property and business taxes.

“

We fear that the tax spiral will continue to worsen in 2027.

This year alone, 156 municipalities increased their property tax (Grundsteuer B), while 98 raised their business tax (Gewerbesteuer). New record highs have been set for property tax rates in Riedstadt and Hofheim, reaching 1,600 percent and 1,545 percent respectively, levels previously considered unimaginable. The Taxpayers' Association warns that this "tax spiral" is likely to worsen in 2027.

Jochen Kilp, board member of the Hessian Taxpayers' Association, explained that these increases reflect the difficult financial situation of many municipalities. He stated that federal and state governments have increasingly burdened local authorities with more tasks and regulations without providing adequate funding. Consequently, cities and towns feel compelled to raise their tax rates, especially property taxes, to finance essential services like social welfare and childcare.

“

Federal and state governments have increasingly burdened local authorities with more tasks and regulations without providing adequate funding.

The burden of increased property taxes will not only affect property owners but also tenants through ancillary costs. The association also noted a growing tendency for tax rates to be significantly higher in densely populated areas like the Rhine-Main region and larger municipalities compared to rural areas.

“

Cities and towns feel compelled to raise their tax rates, especially property taxes, to finance essential services like social welfare and childcare.