Hebesätze

Hebesätze, also known as tax multipliers or assessment ratios, are coefficients used in German municipal finance. They represent the factor by which a property's assessed value is multiplied to determine the amount of property tax a homeowner or business owner owes. Municipalities in Germany have the authority to set their own Hebesätze, which allows them to adjust their local tax revenue to fund public services and infrastructure projects.

The assessed value of a property is determined by tax authorities based on various factors, including its size, location, and type. Once this value is established, the municipality applies its specific Hebesatz. For instance, if a property is assessed at €100,000 and the municipality's Hebesatz for residential properties is 500%, the annual property tax would be €500,000. This is then paid by the property owner.

The variation in Hebesätze among different municipalities can lead to significant differences in property tax burdens for similar properties located in different areas. This variability is a key aspect of the decentralized financial system in Germany, where local governments have a degree of fiscal autonomy. Changes to Hebesätze typically require a formal decision by the municipal council and are announced publicly. This system is a core component of how local governments generate revenue and manage their budgets.