Bremen has never been seen as a mecca for real estate speculators, and local politicians are determined to keep it that way with a new tax proposal.
An agreement earlier this month by the new coalition government of the center-left Social Democratic Party and the Greens aims to stop housing in the city-state from becoming “an object of speculation.”
Sales prices and rents have increased only moderately over the years in the northern German city, compared to metropolises like Berlin, Hamburg or Munich. Last year, for instance, rents increased by only 0.3 percent while condominiums rose by 1.5 percent, according to real estate market research firm F+B Forschung und Beratung.
The government said in a statement it is considering introducing “a ‘locust tax’ to sharply curtail the acquisition of land by real estate locusts.” Ten years ago, then-SPD Chairman Franz Müntefering first used “locust” to criticize investment companies for their ruthless appetite for strong returns.
The tax would come in the form of a higher property transfer tax, which would increase from the current 5 percent to 19 percent for buyers of properties with more than 50 residential units. It would also come on top of rent controls to be introduced at the end of the year.