The Federal Constitutional Court declares the calculation of property tax unconstitutional!
For 36 million plots of land, property and real estate owners, it is now time to submit a new, one- time property tax return in the time frame from July 1, 2022 to October 31, 2022. Those who fail to comply with this new regulation may face a penalty of up to 0.25% of the assessed tax p.m.
The reason for the property tax formation lies in the recently unconstitutional "unit value", which is made up of different factors, including the property value determined in 1964. In the case of the new federal states, it is even still a question of the land value from 1935.
Previously, there were two types in the division of land plots: Plot A, which represents landscaped areas, and Plot B, which relates to built-up plots. Now, another category is to be introduced, which will enable municipalities to exert pressure on land speculators who own land but have not yet built: property tax C from 2025 - for undeveloped land ready for construction.
Until a few days ago, the calculation was fixed. The assessed value was multiplied by the tax rate, multiplied by the assessment rate. From 2025, this is then to be replaced with the property tax value (land value x area).
Since the old land value is no longer applied after the reform, but each plot of land is now assessed individually, land prices are rising enormously. However, to cushion the overall increase, the tax assessment figure is to be lowered. The federal government also advised the municipalities to reduce the assessment rate in order to compensate for a possible tax increase. The idea of the tax authorities was to implement the reform in a "revenue-neutral" manner, so that tax revenues would not increase in general. However, this depends on the respective municipality, in whose catchment area the value of the respective properties can increase exponentially.
The consequence of this reform is now that real estate and property owners must submit certain data for recalculation. It is important to note to submit the following truthfully:
• Tax number for property tax purposes - you will find this on the last property tax assessment notice
• Address of the property(ies)
• Type of building and land
• Area of the land plot
• Living and usable area of the property
• Number of garage/underground parking spaces
• Copy of land register excerpt - information on your property such as land parcel number, district, building area, living area and plot area can be obtained from the land register excerpt
• Owner relationship
• Year of construction
• Standard land value
• Date of the last core renovation
If you pay attention to the specifics of the living space calculation when recording the square meters, you may be able to reduce the property tax payable a little.
Sending data by post is only approved in exceptional cases, otherwise the electronic form is mandatory. For this purpose, the declaration can be submitted via the tax authorities' portal www.elster.de or, alternatively, via third-party providers such as WISO Grundsteuer - www.buhl.de/Grundsteuer.
Tenants and owners in major city locations in particular will have to reckon with hearing costs, as real estate and land here became strikingly more expensive. New construction activities and the sale of many plots of land have caused increasing fluctuation on the real estate market in recent years and influenced the rise in prices.
Most of the federal states have already sent out notification letters about this reform and all the important information. Berlin, on the other hand, does not. So that means for you - as the owner of a property, a plot of land in our capital city - to inform yourself independently. On the following homepage you will find a simplified registration form at www.grundsteuererklaerung-fuer-privateigentum.de.
Although the new property tax is not payable until January 2025, the property tax return must already be submitted now. Furthermore, intensive preparation is probably required for municipalities and owners in order to optimally calculate and implement the consequences of this reform in the future.