Every year again, or more precisely every two years again: the expert committee for land values in the area of the state capital of Munich has published the standard land values as of Dec. 31, 2020. Noticeable increases can be seen in particular in areas where large-scale new buildings have been erected in recent years, resulting in urban development.
Why are the new standard land values so important?
- The standard land values are a value-driving component of tax valuations in both the tangible-asset and capitalized-income methods.
- They are important for all real estate transfers by way of inheritance or donation with a cut-off date of 01.01.2021.
Current development of standard land values
The increases in value since the last reporting date have again been somewhat more moderate. Nevertheless, a steady increase can be observed. Especially in the good or average locations, the increase in standard land values from 12/31/2012 to 12/31/2020 is sometimes over 200%, but usually over 100%. Some examples:
- While the standard land value around the Frauenkirche Munich (cathedral) was still € 16,500/m² as of 31.12.2012, it has developed to € 38,000/m² as of 31.12.2020, which corresponds to a comparatively moderate increase of approx. 130 %.
- The development of the “Paulaner Geländes” has caused the standard ground value around Franziskanerstraße, Regerstraße/Welfenstraße to rise from € 4,700/m² (31.12.2012) to € 11,600/m² (31.12.2020), i.e. by approx. 147 %.
It is crucial that the tax valuation arrives at a correct tax result exclusively in accordance with the rules of the Valuation Act. For this, one needs the decided knowledge of the individual necessary valuation steps and the experience, where the legal “adjusting screws” are to be found for the determination of the tax-optimized value.
Incomplete or even incorrect valuations can lead to excessive values for the taxpayer and thus to a tax burden that is often too high. It is also to be feared that the massive inheritance tax burden cannot be raised due to the high standard land values, and the sale of the real estate, which has often been in the family for several generations, must be undertaken by the heirs as a last resort.
For a real estate handover, it is essential to determine a valid value that is also enforceable vis-à-vis the tax authorities, preferably in advance, in order to calculate the tax consequences of a handover. Only those who know what to expect can make the right arrangements.
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Questions about standard land values and valuation methods?
Lawyer, tax consultant
Specialist lawyer for inheritance law
Managing Director of ACCONSIS
+49 89 547143
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