ATTENTION: New standard land values as of 01.01.2022 – further increases to be expected
Due to the implementation of the real estate tax reform, the expert committees have recently been instructed to set new standard land values as of 01.01.2022, in deviation from the two-year cycle (31.12.2022).
Since these standard land values are also published by the appraisal committees, they also form the basis for the valuation of real estate for tax purposes in the context of inheritance and gift tax.
Due to the steady rise in land prices, it can be assumed that there will be a further increase in value as early as January 1, 2022. The standard land value, which was last published by the appraisal committees before the transfer date, is decisive for the tax valuation and thus for the amount of the gift tax.
If you are planning to transfer real estate in the near future, please contact us as soon as possible so that the standard land values as of December 31, 2020 can be used as a basis. For real estate transfers in 2022, the new values as of 01.01.2022 will then apply.
What are the consequences of publishing the standard land values on 01.01.2022 instead of 31.12.2022?
- The standard land values are a value-driving component of tax valuations in both the tangible-asset and capitalized-income methods.
- They are relevant for all real estate transfers by way of inheritance or donation with the effective date from 01.01.2022.
- Due to the new standard land values as of 01.01.2022, a higher burden for gift / inheritance tax is to be expected.
- Due to the new standard land values as of 01.01.2022, property owners will be deprived of the opportunity to prepare the handover in the short term. Not infrequently, financing of the gift tax will be necessary in this context, which will also require a preparation period.
In any case, a higher gift tax burden is to be expected.
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.
If you have any questions, please contact me.
I will be happy to support you!
Questions about standard land values and valuation methods?
Lawyer, tax consultant
Specialist lawyer for inheritance law
Managing Director of ACCONSIS
+49 89 547143
or by e-mail