Better climate protection through land taxation

In the German newspaper “Der Tagesspiegel”, MCC Director Ottmar Edenhofer criticizes the property tax reform presented by the Federal Council of Germany and recommends an alternative solution.

Foto: MCC

08.11.2016

A few days ago, the Federal Council adopted a draft law on the reform of the German property tax. It is intended to remain a tax on both the land and the buildings. “However, it does not make sense to tax the value of the buildings, if more housing space is to be built in the cities”, says Ottmar Edenhofer, Director of the Mercator Research Institute on Global Commons and Climate Change (MCC) in "Der Tagesspiegel". With the current tax as well as with the reform proposal, investors have an incentive to hoard land as they expect their price to rise in the future. A “pure” land tax, on the other hand, creates “incentives to use the land within the cities more efficiently and prevents unproductive speculation.” In addition, the higher revenues could be used to invest in public transport, which benefits the climate.

 

Read the entire interview with MCC Director Ottmar Edenhofer in “Der Tagesspiegel” (German only).

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