Businesses face hurdles with the introduction of new taxation regulations

Leipzig, a city known for its moderate costs, good infrastructure, and growing industry diversity, is set to undergo a significant change with the implementation of the real estate tax reform, effective from January 1, 2025. This reform aims to recalculate the tax burden for real estate and property owners nationwide, and businesses in Leipzig, particularly those with large property areas or inner-city locations, face higher taxes due to the reform.

The City of Leipzig has provided a central information page on the property tax reform, offering explanations, FAQs, and contact options. The Leipzig Chamber of Industry and Commerce (IHK) also offers regular information, individual consultation appointments, and practical assistance for businesses seeking clarification about the reform.

Challenges Ahead

The new real estate tax value is calculated from property values, property size, property type, building age, and municipal land value references. Data collection for the new tax presents challenges, with businesses required to provide extensive data about their properties and real estate. Electronic submission via the ELSTER portal has often led to delays and uncertainties, especially for businesses without their own tax department.

The distinction between commercial and mixed-use properties is often not clear, further complicating the valuation. Companies with multiple locations or mixed-use properties face a complex tax recalculation.

Support and Resources

The most important support options for Leipzig companies to handle the real estate tax reform 2025 include comprehensive tax advisory services that help optimize business processes and ensure strategic tax planning. These services are often provided by specialized law firms with expertise in corporate tax structuring and regulatory compliance.

Additionally, companies can benefit from consulting on energy efficiency and sustainability measures, which may indirectly affect tax burdens and improve cost efficiency. Tax consultants and auditors offer professional support for complex tax issues and the submission of tax returns.

Industry-specific associations offer advice and exchange specifically for different economic sectors. Networks such as the Bundesverband mittelstaendische Wirtschaft, Leipzig Regional Group, the Saxony Entrepreneurs' Association, and the Leipzig Chamber of Tax Consultants provide expert contacts for tax-related questions and support.

Adapting to the Changes

The reform aims to create a constitutionally sound new regulation, replacing outdated unit values with current land value references, property, and building data. Smaller companies will have to adjust their calculations and plan for additional costs. Rent adjustments are expected due to higher property taxes, which may be passed on to tenants.

Companies are challenged to carefully weigh their decisions and align their strategies for the future. The property tax will be a significant factor in future expansion and investment decisions.

Despite the challenges, Leipzig remains an attractive location due to good transportation connections, an active startup scene, a skilled workforce potential, and proximity to research institutions.

Planning for the Future

Early contact with support services can help businesses better understand the reform and more accurately assess its impact. It is crucial for businesses to start preparing now to ensure a smooth transition and minimise any potential disruptions.

For businesses facing complex tax issues, professional support from tax consultants and auditors can provide valuable insights and guidance. Regularly attending information events organised by networks such as the Saxony Entrepreneurs' Association can also help businesses stay informed and connected with other companies navigating the same challenges.

In conclusion, while the real estate tax reform presents challenges for businesses in Leipzig, with the right resources and planning, companies can successfully adapt and continue to thrive in this dynamic city.