Generally speaking people in cities pay more for a house since the ground and property is rare but they also have a higher income. It is the same in Holland. So if you are smart go live on the countryside.
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Yes but people who work in city have decision to life in city or on the countryside.
But I think not, that state should only accept expences from them who live on the countryside (driving cost) and not expences from them who live in city (higher rent).
In my opinion the most logical and fair system would be to take average expences and add to them the cost of working with tax declaration for this point - the result of this everybody get as tax free income and everybody must take his individuell costs.
But in my opinion german state don't make this because he don't make tax system easier because in this case tax advisor would loos their work.