Real estate tax value: revaluation of real estate as of 01.07.2022
If you are an owner of real estate, then the year 2022 is particularly exciting for you. This is because the implementation of the Real Estate Tax Reform Act (GrStRefG) begins now. This regulates how land is to be valued in future for the purpose of calculating property tax. The reform was necessitated by a ruling by the Federal Constitutional Court in 2018, which at the time rejected the old standard values as the basis for property tax.
In Germany, around 36 million properties will have to be revalued.
The first step will be taken by the tax authorities in the first quarter of 2022. All property owners will be asked by the tax authorities to determine the property tax value themselves in accordance with the new rules. Subsequently, the respective declarations of assessment are to be submitted to the responsible tax offices. So this also applies to you!
The deadline for submitting the declarations of assessment ends on October 31, 2022, at least as far as the current status is concerned. What this means for you in concrete terms is that you should prepare for the revaluation of your real estate in good time. The TAXON team will support you professionally with our expertise as tax consultants. Please contact us. In a consultation, we will explain to you exactly what will change for you as a result of the reform, what is important and what you can and must do now.
Things are now getting serious with the new property tax for real estate. We support you with the revaluation of your real estate.
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SERVICES: These are the tasks we perform for you as experts in the valuation of real estate in connection with the new real estate tax reform law
Real estate valuation according to the Real Estate Tax Reform Act (GrStRefG)
- Compilation of the necessary data and documents
- Calculation of real estate values according to the new rules
- Timely preparation of the tax return
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Tax Consultant
Certified MBA
Graduate Business Teacher
Tax Consultant
Auditor
Certified MBA
Tax Consultant
Graduate Tax Lawyer (FH)
The previous assessment data are outdated
Until now, all real estate, regardless of whether developed or undeveloped, used for residential, commercial or agricultural and forestry purposes, had a standard value determined by the responsible tax office, which was mainly used for the purpose of determining property tax. Every property owner knows this. The property tax is levied by the municipalities and represents a significant source of revenue.
However, the assessment data were determined for the western part of Germany based on the value ratios as of 01.01.1964 and for the eastern part of Germany based on the value ratios as of 01.01.1935.
In its ruling of April 10, 2018, the Federal Constitutional Court declared the regulations for assessing property tax, which were based on outdated data, to be unconstitutional and required the legislature to revise the basis of assessment for property tax by Dec. 31, 2019.
With the Real Estate Tax Reform Act (GrStRefG), the legislature has complied with this requirement. The previous regulations will continue to apply for a transitional period until December 31, 2024.
In order to implement the Real Estate Tax Reform Act, a main assessment of property values will initially be carried out as of January 1, 2022. Subsequently, an updated value will be determined every seven years. In Germany, around 36 million properties are to be revalued!
Property owners should determine new property value themselves!
To this end, all property owners will be requested by the tax authorities in the first quarter of 2022 to determine the property tax value themselves and to submit the corresponding declarations of assessment. The deadline for submitting the declarations of assessment is scheduled to end on October 31, 2022.
The tax offices will then begin to determine the property tax values and pass the values on to the cities and municipalities for the assessment of property tax from 01.01.2025. The newly determined property tax will then be payable from this date.
The federal government’s rules for determining the value of real property tax are based on the previous procedure and are calculated according to real property tax value x tax rate x assessment rate. As the property valuation is likely to be significantly higher in the future, the tax assessment factor will be significantly lowered. The amount of the property tax ultimately depends on the assessment rate set by the individual cities and municipalities.
There is an opening clause in the Basic Law for the federal states to apply the federal model in a modified form. As things stand, nine federal states (Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, Schleswig-Holstein and Thuringia) have opted to apply the federal model, whereas the remaining federal states want to apply their own modified calculation methods (Baden-Württemberg, Bavaria, Hamburg, Hesse, Lower Saxony, Saarland and Saxony).
The time to act is now
The data relevant for the preparation of the declarations of assessment must be compiled. Depending on the type of valuation, data on the size of the plot, standard land value, type of property, age of the building, living space, net cold rent, etc. must be compiled, which can be time-consuming, especially for older properties.