Before I travel to Munich for Expo Real, the largest trade fair for real estate and investment in Europe, I recently had the opportunity to talk to the Hessian Minister of Finance, Prof. Dr. Ralph Alexander Lorz (CDU), in Frankfurt. As my focus is on investment real estate, I always represent the interests of my clients in the political arena. The current market situation in the real estate sector is well-known to be challenging. For this reason, I have highlighted to Prof. Dr. Ralph Alexander Lorz the great importance of real estate investors in terms of economic growth and tax revenues. Through their construction activities, real estate investors promote economic growth, create new jobs, and develop infrastructure. These activities lead to higher tax revenues through property, land transfer, or trade taxes.
The newly introduced Hessengeld as a state subsidy for the first-time purchase of owner-occupied property in Hesse is certainly well-intentioned, but such market interventions generally lead to windfall gains, including higher property prices. That is why I have suggested to the Hessian Minister of Finance, Prof. Dr. Ralph Alexander Lorz, that reducing the real estate transfer tax would be better. This would generally reduce the cost of buying a property. Every market participant in Hesse will feel this relief. With a rate of 6%, Hesse is one of the top German states for land transfer tax. A study by the IW German Economic Institute (Michael Voigtländer / Pekka Sagner) recently found that a 50% reduction in land transfer tax rates would increase the number of building permits by 9%. Building completions would then also increase with a time lag. This would expand the supply of urgently needed living space.
Many thanks to the Hessian Minister of Finance, Prof. Dr. Ralph Alexander Lorz, for the open and constructive exchange.
My special thanks to the Association of Catholic Entrepreneurs (BKU) for arranging the discussion with the Hessian Finance Minister after a presentation of the CDU-politician. (Diocesan group Rhine/Main: Clemens Nebel / Diocesan group Fulda: PD Dr. Dr. Kai Witzel)
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