When I bought my first piece of property in 1996 the real estate transfer tax was 2%. The rate was raised to 3.5% shortly thereafter. Germany’s federalist reform of 2006, which made this a state-level tax, has triggered something of a race among the German states to charge the highest real estate transfer tax.
Even back then, I warned that 4.5% was unlikely to be a limit no state would dare cross. At this time, I would like to reiterate my warning: There is no reason to believe that government greed will settle for 6.5%. Chances are that we will see the real estate transfer tax cross into the double-digit range in Germany.
The current tax revenues are the highest ever seen in Germany’s history. Yet contentment is an alien concept in the body politic. Moreover, government rapaciousness blends with ideologically motivated envy vis-à-vis property owners. According to the socialist ideologeme endorsed by Social Democrats, Greens and Leftists – and, sadly, shared even by some Christian Democrats – homeownership is something to be stifled, not stimulated. For tenants are seen as staunch left-leaning voters, especially if you keep them happy with make-believe gifts like the so-called “rent freeze.”