Property Tax Rates in Saxony - Minimal Additional Burden from Real Estate Tax - Saxony’s land tax reform delivers uneven financial results across municipalities
Saxony’s municipalities have completed their land tax reforms, with most aiming to keep revenue stable. However, the changes have led to mixed financial outcomes across the region. Some areas now face higher tax burdens, while others see little impact on their budgets.
The Federal Fiscal Court recently upheld the federal model for property assessments as constitutional, providing legal clarity for local governments.
The reform’s rollout in Saxony showed varied results. Around 40 municipalities reported a drop in land tax revenue, while 100 saw an increase. Most, however, adjusted their assessment rates to maintain revenue neutrality.
Dresden experienced a noticeable decline in tax income, contrasting with Leipzig, where figures remained steady. The reasons for these differences lie in how each municipality set its rates. Those with significant revenue growth often chose assessment levels well above the recommended neutral range.
In the first half of 2025, some local authorities pushed rates even higher to fund projects and boost budgets. This move has raised concerns about increased financial pressure on property owners, particularly in areas where taxes have risen sharply.
The long-term effects of the reform will become clearer once full data for 2024 and 2025 is available. Until then, the picture remains uneven, with some communities benefiting and others facing unexpected shortfalls.
The land tax reform has created a patchwork of outcomes in Saxony. While many municipalities kept revenue stable, others now deal with either higher income or unexpected losses. Property owners in areas with steep rate hikes may feel the strain most acutely in the coming years.
