Dear Sir or Madam,
everyone is talking about the property tax reform. And all owners of approx. 36 million properties in Germany are affected by it. You will now receive concrete information and our offer on this subject.
What is the aim of the reform?
In 2018, the Federal Constitutional Court has ruled the way property tax is calculated to be unconstitutional. As a result of the revaluation, properties of the same size and location should also pay the same property tax in the future. This was not previously the case due to the determination of the property tax on the basis of standard values from 1935 in the new federal states or 1964 in the old federal states.
The first effective date for the revaluation is 01.01.2022. The new property tax will then be levied from 01.01.2025.
How will property tax be determined in the future?
The legislator has retained the previous approach for determining it:
Property tax = property tax value x tax rate x assessment rate
Property tax value: determined by the tax office on the basis of the assessment declaration
Tax rate: is determined by law
Assessment rate: determined individually by each city or municipality
How is the property tax value determined?
Everyone who was a property owner on 01.01.2022 must electronically transmit a declaratory statement on the valuation of the property to the tax office. According to information from the Federal Ministry of Finance, this is to be done via the ELSTER online tax platform.
The declarations can be submitted from 01.07.2022.
The deadline for submission is 31.10.2022.
You will be notified of the declaration obligation either by public notice or you will personally receive a letter from the tax office.
What values are levied in the tax return?
In principle, the so-called federal model applies to the revaluation of the property tax value. This is based on the following valuation procedures:
1) undeveloped properties
All undeveloped properties are simply recorded with the standard land value times the plot area.
2) Single-family and two-family houses, rented residential properties and owner-occupied residential properties
The valuation is carried out using the typified income capitalization approach. This is fundamentally based on legally defined net cold rents depending on the location and type as well as age and size of the building.
3) commercial properties, mixed-use properties, miscellaneous developed properties, part ownership
The valuation is carried out using the typified asset value approach, which is based on statutory standard production costs, which vary according to the type and age of the building.
In deviation from this, federal states can also develop their own state model for determining value, of which the following states have made use:
- Lower Saxony
Which documents are required for the tax return?
Depending on the valuation method, the following documents should be kept ready for the declaration.
- location of the property
- district, parcel and land parcel
- property area
- ground value
- ownership structure
- type of property (undeveloped, residential, other development)
- age of the building
- type of use
- architectural monument (yes/no)
- any demolition obligations
- the living space (for the income capitalization approach) and the floor space of the building (for the asset value approach)
Most of the information is already available from the purchase contract, the land register sheet, the notice of assessed value, the notice of property tax and the declaration of division. Any documents that are no longer available can be re-applied for from the relevant authorities.
How can we support you? - Our offer
We will gladly take over the preparation of the declarations of assessment for you.
We are currently testing two software providers to make the data collection and reporting process efficient for you. In the next few weeks, we will actively approach you to request data that is not yet available or to have you countersign the declarations. That is all you need to do.
Please note that our powers of attorney are only valid for this purpose from the time the declarations are submitted. Therefore, please be sure to forward any correspondence from the tax authorities to us.
As soon as notices are issued by the tax authorities for the declarations submitted by us, we will automatically receive them, check them and send them to you accordingly.
If you do not wish to do this, but would rather prepare the declaration yourself, please let us know explicitly by e-mail by May 13, 2022. In this case, we will not schedule any capacity for the preparation of property tax returns for your properties.
We look forward to assisting you as a service partner here as well.