Proposals for a Reform of Real Estate Taxation

Real estate plays an important role in wealth creation and wealth distribution. Accordingly, it is important to ensure that taxation of real estate investments is fair and efficient. There are considerable gaps in the taxation of real estate in Germany. The consequences are misallocations in the real estate market and an unfair distribution of the tax burden in favor of high-income taxpayers. Comparatively minor legislative corrections to income tax, trade tax, inheritance tax, and real estate transfer tax could remedy these problems and increase tax revenue without burdening economic development.