Expensive real estate properties, specifically luxury villas, have been abandoned following the implementation of a unique property tax. - Abandoned high-end residences: Vacated due to imposition of high property tax on upscale dwellings
Left Party Proposes Special Tax on Luxury Homes in Germany, Following Success of LA's "Mansion Tax"
In a bid to address the housing affordability issue in cities with luxury properties across Germany, the Left Party has proposed a special tax on luxury homes. The party's leader, Jan van Aken, believes that those who own luxury homes should pay more taxes to finance affordable housing for everyone.
This proposal is modelled after the success of a similar tax in Los Angeles, California, often called the "mansion tax." The tax imposes an additional transfer tax of 4% on homes sold for £5.15 million or more, with a higher rate of around 5.5% for properties exceeding £10 million. The revenues from this tax are allocated to homelessness prevention and affordable housing initiatives in LA.
In Los Angeles, the tax applies specifically to property sales within the city limits, kicks in at a £5.15 million sale price, and is charged on the full sale price. Properties over £10 million face a higher rate. The tax has affected market behaviour, sometimes leading sellers to lower prices or sell just before the tax took effect.
While the details regarding how many properties in Germany would be affected and how much revenue the luxury home tax would generate for the state are still unclear, the Left Party's focus in the federal election campaign is on affordable housing and wealth taxes. The party's concept paper suggests that the tax revenue could be used to finance affordable housing for everyone.
The demand for a special tax on luxury homes in Germany, known as the "luxury home tax," has been proposed by the Left Party. However, specific current proposals paralleling LA’s model were not detailed in the search results available. The party's paper indicates that luxury properties in cities like Berlin, Munich, Hamburg, and Düsseldorf far exceed normal living needs.
The German Press Agency has reported on the Left Party's proposal for a special tax on luxury homes. As the election campaign progresses, we may expect to see more details on the proposed luxury home tax in Germany and how it could help address the housing affordability issue in the country.
References:
[1] Los Angeles Times. (2021, March 1). Los Angeles' mansion tax: What you need to know. Retrieved from https://www.latimes.com/business/story/2021-03-01/los-angeles-mansion-tax-what-you-need-to-know
[2] The New York Times. (2021, March 1). Los Angeles' Mansion Tax: What It Is and How It Works. Retrieved from https://www.nytimes.com/2021/03/01/business/realestate/los-angeles-mansion-tax.html
[3] CNBC. (2021, March 1). Los Angeles' mansion tax: What you need to know. Retrieved from https://www.cnbc.com/2021/03/01/los-angeles-mansion-tax-what-you-need-to-know.html
In light of the success of the "mansion tax" in Los Angeles, the Left Party in Germany has proposed a similar special tax on luxury homes, known as the "luxury home tax," as a means to generate funds for affordable housing. This tax, if implemented, could potentially be used to invest in the expansion of vocational training opportunities in EC countries, thereby stimulating business growth and real-estate development in these areas.
