Further update 31/01/2023: In Bavaria, the deadline for submitting property tax returns is extended to the end of April.
Instead of the end of October, they now do not have to submit their property tax returns until the end of January 2023. This was decided by the finance ministers of the federal states.
The standard value as the assessment basis for the property tax paid by every land and property owner in Germany was ruled unconstitutional by the Federal Constitutional Court in 2018.
In the meantime, the legislature has passed a new property tax law, which contains the regulations for revaluation. To this end, in 2022, all land and property owners must file a tax return with the relevant tax office.
New property tax: Important questions and answers
How will the new property tax be determined?
In the future, the property tax value will form the basis of assessment. For this purpose, all land will be revalued as of 01.01.2022. The newly determined property tax will then be due for the first time as of 01.01.2025. The property tax itself is determined by the respective municipalities.
Who is affected by this property tax reform and what to do?
For the revaluation of land, all land and property owners in Germany must electronically submit a determination declaration to the tax authorities for each real estate unit or plot of land. This applies to both private individuals and companies.
What are the deadlines for determining the new property tax?
It is expected that from the end of March 2022 there will be a call for the submission of corresponding declarations of determination by public announcement of the tax administration. In addition, some state tax administrations plan to send separate information letters to each property taxpayer.
Originally, the assessment return had to be submitted in the period from 01.07.2022 to 31.10.2022.
On October 13, the finance ministers of the federal states decided that the property tax return must now be submitted by the end of January 2023.
How is the reassessment under the federal model done?
Revaluation is based on the use of the land. Residential properties are valued according to the income capitalization approach, while business properties or mixed-use properties are valued according to the simplified asset value approach.
This value-based method takes into account individual property factors such as rental and land prices to determine the market value.
Important to know: States can deviate from this regulation at the federal level! Some federal states have made use of this. These include Baden-Württemberg, Bavaria, Hamburg, Hesse and Lower Saxony.
What applies in Bavaria?
Bavaria has introduced an area model, i.e. a value-independent model. The value determination thereby deviates fundamentally from the property tax law. It is based on the area of land and building, as well as living space and property use. Age of the property and its value do not play a role.
What documents do I need to submit and where?
What documents and evidence you must submit varies by state and the evaluation process used.
- Generally, the tax authorities require general land register data, information on the property use (residential / commercial)) and the standard land value.
- Depending on the federal state or model, additional information is required, such as the property type, year of construction, gross floor area and the usable or living space of the building,.
The corresponding declaration must be submitted by the owner online via the tax portal ELSTER.
What happens if the declaratory statement is not submitted or is submitted too late?
As a rule, the competent tax office will send a reminder subject to a justified and approved extension of the deadline. In addition, an estimate of the property tax value may be made and/or a late payment penalty may be assessed.
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