Property tax reform Assessment notice, filing deadlines, and calculation

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Property tax reform: filing deadline and calculation of assessment notice

The property tax reform places an additional financial burden on you as a landowner, house owner, or apartment owner. To avoid errors in tax calculations, the area specifications must be accurate. In some cases, it may be worthwhile to hire a measurement service for this purpose. The property tax reform came into effect on January 1, 2025. Since then, all owners of land and real estate have been required to prepare a property tax return and submit it to their tax office. The tax authorities use the data contained therein to calculate the property tax. You must obtain the relevant information about your land or real estate yourself, depending on the state in which the land or real estate is located.

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Why was a property tax reform necessary?

The German tax authorities levy property tax on land and real estate. The basis for calculation is currently the property values set by the legislature in 1964 (old federal states) and 1935 (new federal states). In a ruling dated April 10, 2018, the Federal Constitutional Court declared the calculation of property tax based on the old property values to be unconstitutional because it does not reflect the change in value of land and real estate. To change this, the Federal Constitutional Court instructed the legislature to develop a new method for calculating property tax. This will be initiated with the implementation of the property tax reform. The basis for determining the new property tax will no longer be the outdated property values, but the property tax value determined using the data from the property tax return.

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Property tax reform: Which legal bases apply?

The calculation and collection of property tax are based on the provisions of the Property Tax Act and the Valuation Act. The regulations contained herein have been adapted accordingly for the implementation of the property tax reform.

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Property tax reform: What do you need to do now?

With the introduction of the property tax reform, you as the owner of land or real estate are also required to submit your property tax return to the tax office. Before you submit the return digitally using the ELSTER form provided by the tax authorities, you should obtain the necessary data in advance.

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Property tax reform: Which data is important?

The property tax reform is not being implemented in the same way in all federal states. If your property is located in Baden-Württemberg, the land value model applies. If you have to submit a property tax return for a property located in Bavaria, Lower Saxony, Hamburg, Hesse, or Lower Saxony, the new property tax is calculated according to the area factor model. All other federal states base their calculation of the new property tax on the federal model. If your tax office uses the land value model, you will need to provide additional information in addition to the land register data for the calculation. This includes the standard land value and the property area. If the area factor model is used, the living space is also decisive for determining the new property tax. If the property tax reform is implemented using the federal model, additional data is required. This includes, for example, the type of property, the number of apartments, and the number of garages.

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Property tax reform: The property tax return

You provide the data to your tax office by submitting your property tax return. The tax office will only accept the return if you have submitted it electronically using the tax office's ELSTER form. Paper returns will not be accepted.

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Property tax reform: When is the deadline?

The legislature has set fixed time frames for the submission of property tax returns in the implementation of the property tax reform. Failure to submit a property tax return or submitting it late has the same consequences as submitting an income or sales tax return late. This means that your tax office can impose a late filing penalty. The imposition of a late filing penalty is enshrined in law in Section 152 of the German Fiscal Code. According to this, the tax office is entitled to impose a late filing penalty of at least 10% of the tax assessed and a maximum of €25,000. Please note that this is initial information and is not guaranteed to be accurate.

All information has been compiled to the best of our knowledge. However, we cannot accept liability for the details.