Dressel announces lowering of ground rent

The Hamburg Senate is reacting to the increasing challenges in housing construction and the increasing criticism from the housing industry by lowering the ground rent. The tax authority announced on Wednesday that it was planned to reduce ground rent for residential construction from 1.5 to 1.3 percent this spring and for commercial construction from 1.8 to 1.6 percent. Finance Senator Andreas Dressel (SPD) made a corresponding announcement on Tuesday at the real estate meeting of the Chamber of Commerce.

The interest rate relief should apply until at least the middle of the decade, it said. The corresponding resolutions are to be made in the spring in the Senate and Parliament. The Finance Senator is also in talks with the housing industry about improvements to existing building leases. This criticized the fact that in Hamburg areas for residential construction should only be allocated within the framework of heritable building rights. This would further increase the cost of housing.

"We will do everything to ensure that the housing construction engine in Hamburg continues to run in the current crisis," said Dressel. With building interest rates rising by around four percent for long-term financing, a falling building interest rate of 1.3 percent makes building leases more attractive. “We can thus offer the most attractive conditions among German metropolises. And internationally, heritable building rights, building on third-party land, is a very common instrument, which will certainly convince some critics in Hamburg as well.”