New criteria to determine the “new” property tax

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 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.

Andreas Fenners

Andreas Fenners

Tax Consultant, Graduate economist, Foundation consultant (DSA) | Phone +49.6102.71170 |