In 2022, all land in Germany must be revalued.

In April 2018, the Federal Constitutional Court determined that the existing property tax was unconstitutional. This led to the creation of new legislature and new regulations which was passed in the Bundesrat on 08.11.2019 and which will come into force on 01.01.2025.

What changes?

Each federal state is able to introduce its own property tax model as a result of the legislative reform, so there are different models depending on the federal state.

Hesse, Bavaria, Hamburg and Lower Saxony will employ a so-called “area factor method” to determine the property tax in future. In this procedure, the taxpayer must provide information on the area of land and living/usable space in the tax return. The tax office then determines the resulting valuation factor.

Baden-Württemberg will implement a pure land value tax without evaluating the building.

All other federal state will follow the so-called “federal model” for determining the new assessment of the land tax. In these cases a complex, separate determination of the land and building value is carried out. The assessment is similar to the determination of market value.

Who is affected by the submission of the assessment declaration?

Every landowner – irrespective of whether it is owner-occupied or rented property, single-family or multi-family house, condominium or agricultural and forestry property.

What has to be done?

In order to be able to implement and carry out the necessary procedures, the respective tax authorities require information from you. This information is recorded in declarations of assessment, the scope of which varies depending on the federal state and the determination model used by that state.

You can only submit these declarations of assessment to the tax office electronically via the ELSTER procedure; this requires registration via the elster.de portal and the creation of an ELSTER user account (unless you already have a user account, e.g. for your income tax return).

Alternatively, Portfolio mandates are welcome to contact us. We will support you in preparing the assessment return and submit it for you in a legally secure manner, so that you do not have to worry about having your own online access, preparing and submitting the assessment return.

Important deadlines!

As a rule, the declarations of assessment must be submitted between July 1 and October 31, 2022. New Deadline January 31, 2023 – according to the Hessian Ministry of Finance dated 13.10.2022.

We will be happy to assist our Portfolio mandates with all questions regarding the property tax reform and your costs.

Der Beitrag New criteria to determine the “new” property tax erschien zuerst auf Klaus und Partner Steuer und Recht.

Operators of small solar plants can apply for tax exemption

In the result, all income from photovoltaic systems and mini combined heat and power plants had to be declared for income tax purposes.

After the Bundesrat demanded tax relief for small plants on or in private houses, the Federal Ministry of Finance reacted in summer 2021 and created a new wide range of regulations for such small plants.

To which installations do the regulations apply?

The plants must meet the following requirements:

• The plant was put into operation after March 31, 2003.
• It is a photovoltaic plant with an output of up to 10 kW/kWp or a comparable combined heat and power plant with an output of 2.5 kW.
• The generated electricity is used for one’s own private residential purposes or fed into the public power grid. The tax advantage is not jeopardized if the electricity is also consumed in the home office or if the rental income from rented rooms does not exceed Euro 520.00 in a calendar year; an unpaid letting out of living space is also not tax-detrimental. The same applies to mixed-use buildings (private residential purpose/own or third-party business purpose) if the use of electricity for the rooms or parts of the building used for business purposes is technically excluded.
• There are special features for uniform commercial operations (operation of several plants) and the treatment in the case of spouses (e.g. each operates a plant).

To which types of property do the regulations apply?

The regulations now apply to owner-occupied or rented out

• single-family and two-family house properties (also e.g. garages)
• apartment buildings;
• facilities owned by a tenant (i.e. not the property owner).

What to do?

As before, you must submit an application to your local tax office. Incidentally, claiming the new concession regulation does not lead to a denial of the input tax deduction under VAT law, i.e. it does not necessarily result in a small business regulation.

Important deadlines!

The most recent BMF letter in this context contains the following application deadlines:

• For new plants (= commissioning after 31.12.2021), the application must be submitted by the end of the assessment period following the year of commissioning.
• For old installations (= commissioning before 31.12.2021), the application must be submitted by 31.12.2022.
• If the tax assessment notice for the assessment period 2020 has already been issued but has not yet become legally effective, the application can still be submitted with effect for 2020.
• If the tax assessment notice for the 2020 assessment period has already become final, the application can only be filed with effect from the 2021 assessment year. For 2020, the only remaining option is to apply for the granting of factual equity measures, but it remains to be seen whether this will be successful.

The new regulations are intended to reduce bureaucracy, promote the energy turnaround and protect the climate.

We will be happy to advise you individually on tax issues relating to your photovoltaic or combined heat and power plant.

Our tax consultant, Mr. Andreas Fenners, will be happy to answer all your questions regarding the new possibilities.

Der Beitrag New options for income tax erschien zuerst auf Klaus und Partner Steuer und Recht.

The new apportionment calculation of the total purchase price of developed properties can be profitable especially in urban areas.

When acquiring tax-relevant real estate assets, only the building portion can be used as the basis for tax-reducing depreciation.The land itself has no tax effect or tax relevance.

The calculation program previously used by the Federal Ministry of Finance was overturned by a ruling of the Federal Fiscal Court on the grounds that it did not lead to a clear-cut division between the building and the land.

The background to this was that the calculation tool could only calculate according to a single valuation method and in some cases did not take sufficient account of regional market developments. Especially in metropolitan areas, such as in the Rhine-Main area, the share of land can, due to the considerable price development, account for up to 70% of the total purchase price when using the “old” calculation tool. As a result, the building share decreases and thus also your tax depreciation possibility.

The new online apportionment tool of the Federal Ministry of Finance is now based on different valuation methods. This can lead to a more favorable result for your tax-relevant property than with the “old” method.

We control the future with you!

We will be happy to check for you whether a recalculation will lead to a better result and explain any new depreciation in your next tax return.

If you are thinking of buying a tax-relevant property, you can already include a division between the values of the building and the land in the purchase contract. However, please do not deviate too far from the valuation by the new calculation tool. We will be happy to assist you in this regard as well.

For all questions concerning the new possibilities of the purchase price allocation of your real estate, our tax consultant, Mr. Jens Kunkel is at your disposal.

Der Beitrag New possibilities of depreciation erschien zuerst auf Klaus und Partner Steuer und Recht.