Following Federal Chancellor Friedrich Merz's announcement that the draft for the planned Investment Protection Act has been completed, leading representatives of the German real estate industry are calling for its swift and uncompromising implementation. Dirk Wohltorf, President of the German Real Estate Association IVD and Chairman of the Federal Real Estate Working Group (BID), described the initiative in principle as an important signal, but criticised the emerging discussions within the governing coalition.
The criticism was triggered by reports of internal debates in which compensation rates of 80 or 100 per cent of the market value are allegedly being negotiated. For the property sector, such a tiered approach is unacceptable. Wohltorf stressed that the protection of property is not a bargaining chip and must under no circumstances be degraded into a political trade-off where legitimate protective interests are offset against concessions in other departmental portfolios.
Reliability as the foundation for private investment
In this context, the BID unequivocally demands compensation in the full amount of the actual market value, which must be paid promptly and in cash. From the association's point of view, there is not necessarily a need to stipulate a rigid percentage in the legislative text; rather, the decisive factor is that the outcome guarantees complete, dependable and legally robust compensation. Anyone arguing over mathematical quotas overlooks the fact that, at its core, this is about confidence in Germany as a business location.
- —Full and legally robust compensation amounting to the complete market value
- —Payment of compensation immediately and in cash
- —Renunciation of coalition horse-trading at the expense of property protection
- —Swift adoption of the legislation to avoid further uncertainty in the market
Significance for housing construction and Germany as a business location
According to the associations, the credibility of state framework conditions is at stake. The confidence of private stakeholders in legal certainty is already under noticeable strain. If politicians are pursuing the goal of mobilising urgently needed private capital for housing construction, they must not permit any doubts to arise regarding the inviolability of property.
In conclusion, the BID Chairman appealed to the Federal Government to adopt the legislative proposal without further delay. Any hesitation and any bargaining over percentage points sends devastating signals to those investors who are prepared to invest in new-build projects and secure jobs in Germany.
