Tax reform requires all German real estate to be revalued for property tax purposes

Tax reform – What does that mean to me?

All German real estate properties will be revalued as at 1 January 2022, based on information reported by taxpayers in property tax returns.

The value of all German real estate (including residential and non-residential property) will be recalculated as at 1 January 2022, based on information reported by taxpayers in property tax returns. These tax returns are due 31.10.2022. 

In April 2018, the Federal Constitutional Court declared the property tax assessment system to be incompatible with the German constitution and required the German legislature to establish new property tax rules by 31 December 2019. The legislature passed the new legislation on 8 November 2019, and the new rules will enter into effect as from 1 January 2025.

Filing of tax return(s) due by 31 October 2022

The new rules base the valuation of real estate on a property tax value (Grundsteuerwert), replacing the formerly used unit value (Einheitswert).

In order to calculate the new real estate value, a tax return as of 1 January 2022 must be filed. The tax return will serve as the basis for the assessment of the property tax as from fiscal year 2025. Until then, the existing rules continue to apply.

The responsible tax authorities are expected to request the submission of the tax return through an official announcement in March 2022. The deadline for filing the tax returns is 31.10.2022.

The property tax is calculated as follows: real estate value x tax rate x assessment rate = property tax. The assessment rate varies depending on the municipality in which the property is located, while the basic tax rate is set at the federal level.

The information required to be reported in the property tax return as of 01.01.2022 depends on the use of the property (residential vs. nonresidential properties).

What to do now?

Steuerkanzlei Fenzl will be happy to support you in this process to ensure a correct valuation and a timely delivery. Please let me know, if I can support you, by clicking or scanning the following QR-Code:


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