Property tax reform

The property tax reform is the biggest tax reform in decades in Germany – 36 million plots of land were revalued.

Why the reform?

• Federal Constitutional Court ruling 2018: the old values (West: 1964, East: 1935!) were unconstitutional
• Problem: identical houses paid different property tax depending on the year of construction
• New valuation: based on current values (standard land value, area, year of construction)

Federal model (10 states incl. North Rhine-Westphalia, Berlin, Hesse):

• Value-based: standard land value × area × base rate × multiplier
• Takes into account: land value, type of building, rent level

State models (own rules):

• Bavaria: area model (only the area counts, not the value – simpler but less precise)
• Baden-Württemberg: land value model (only standard land value × area)
• Hamburg, Lower Saxony: their own variants

Multiplier:

• Set by the municipality (e.g. 400–800%)
• Revenue-neutral: municipalities are supposed to adjust the multiplier so that they collect the same total property tax
• In practice: some raise it anyway

What you can do:

• Check your notice: are the area, standard land value and year of construction correct?
• Objection: within 4 weeks of delivery (legally: one month)
• According to experts: approx. 30% of notices contain errors
• Property tax value notice + property tax base notice: check both!