Halle's budget crisis deepens as council rejects tax hikes and housing dividends
Halle (Saale) city council has approved a new budget consolidation plan after a last-minute amendment blocked key revenue measures. The original proposal included a property tax hike and dividend payments from municipal housing firms, but these were scrapped following opposition from a coalition of parties.
The changes mean tenants will avoid potential rent increases linked to higher costs for landlords, though the city now faces a funding shortfall for planned maintenance work. The council's initial plan aimed to raise the property tax rate (Grundsteuer B) to 535 percent, which would have brought in €10.1 million over five years. Additionally, the city sought €21 million in dividend payments from its two housing associations, HWG and GWG. These funds were intended for building upkeep, but critics warned the costs could be passed on to renters.
A joint amendment by the Left Party, SPD, Greens, and Volt/Citizens' Alliance rejected both measures. Katja Müller, leader of the Left Party's council group, argued the decision would ease financial strain on households. Without the tax increase or housing dividends, however, the city must now find alternative ways to cover maintenance expenses.
Local rental prices currently range between €7 and €11 per square metre, depending on the area. The approved austerity package includes other cost-cutting steps, but no data exists comparing Halle's approach to similar cities with tight budgets. It remains unclear how the changes will affect long-term housing affordability in the region. The rejected tax and dividend plans leave Halle without €31.1 million in expected revenue. Housing associations will retain funds originally earmarked for repairs, while the city must adjust its financial strategy. Tenants benefit from stable costs for now, but future maintenance backlogs could pose challenges for building conditions.
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