“We would become welfare recipients”: The real estate tax madness really starts after January 31st
The filing deadline for property tax ends in January. But for tens of thousands of apartment and house owners, the madness will only begin when the property tax assessment notices arrive. Many have no idea what is in store for them financially. In contrast to a pensioner from Freiburg. He should pay 2478 percent more in the future.
The clock is ticking. The submission deadline for the new property tax finally ends on January 31st. Since July 1, 2022, the owners have had time to do the job for the tax authorities. All the relevant data is already available there. They should just be merged. Too much for the chronically overloaded administration.
It fits well into the picture that the federal government will tear its own deadline for its properties, as was announced this week. But that doesn’t help private individuals, who face hefty penalties in the form of fines or default penalties if they fail to do so.
A total of 36 million properties and buildings have to be revalued from Flensburg to Freilassing. The return from the tax offices is hesitant. At the beginning of the year, 20 million property tax returns were still missing.
In the future, homeowners should pay property tax of EUR 11,138.40 instead of EUR 432
In recent months, FOCUS online has repeatedly received letters from readers who reported on their experiences with the new property tax. Now a pensioner from Freiburg has contacted us. He has been paying 432 euros in property tax a year so far. If the new property tax takes effect, it will be 11,138.40 euros. An increase of 2478 percent.
A mistake? Unfortunately, no.
The new property tax calculation will apply from 2025. The new law became necessary because the old one was unconstitutional. Until now, the tax authorities had calculated the property tax on the basis of rather outdated data from the 1960s in the West. In East Germany they have not been updated since the 1930s.
In addition to land area and standard land value, the type of property, net cold rent, building area and building age are also included in the federal property tax model. However, the federal states are free to pass their own laws. Nine federal states use the federal model, two federal states (Saxony, Saarland) use the federal model with deviations, and five federal states have passed their own property tax laws (Baden-Württemberg, Bavaria, Hamburg, Hesse, Lower Saxony).
Property Tax – The Big Guide – PDF
The reform for the new property tax is complex – and this year it will require owners. You have to submit some data to the tax office. You have to be very precise and observe special deadlines. In our large guide you will find all the information you need to know in a compact form.
Baden-Württemberg has made use of this “opening clause” and opted for a standard land value model. The standard land value is a value of land in a specific area determined by expert committees of the municipalities. Buildings play no role in the Ländle.
Small house, large lot
The reader from Freiburg has a small single-family house, built in 1956, but on a large property with over 2400 square meters. It is not suitable for densification, especially since it is located on a stream. It is not possible to sell parts of the property as building land.
The standard land value in his residential area is one of the highest in Germany at 880 euros per square meter. His property tax amount is 1856.40 euros. The property tax rate in Freiburg is also considerable at 600 percent. According to Ernst & Young, this averaged 386 percent across Germany in 2021.
When determining the tax burden, the tax office multiplies the property tax amount by the assessment rate. This results in the amount of the future property tax. In this case, this means: 1856.40 x 6 = 11,138.40 euros. “We would be the new property tax to welfare recipients,” says the pensioner to FOCUS online. Almost 2800 euros would be due quarterly.
Municipalities could reduce the property tax burden by means of an assessment rate
The final adjustment screw lies with the municipalities, which could theoretically also reduce the real estate tax burden by lowering their assessment rates. But who really believes in it? According to the Haus & Grund owners’ association, many of the often chronically cash-strapped towns and communities are already raising their property tax rates across the country. The new property tax should be revenue-neutral for you from 2025, i.e. not flush more into the till than before.
Tell us about your experiences with the new property tax
The recalculation of the property tax and its implementation stirs the mind. Send the editors an email to [email protected] with the keyword/subject “Landsteuer” (property tax) stating your name, age and place of residence and briefly describe your experiences. Have you already received your decision from the tax office? How much more should you pay in the future? Please write to us.
The owners of large plots of land are particularly affected in the Baden-Württemberg model. It is often pensioners who own large plots of land, but with comparatively small and often outdated houses on it.
The majority are by no means millionaires, for whom a few thousand euros more or less does not matter. Dozens of such examples are available to FOCUS online. In addition, a division of these large plots of land is often not possible at all, because the natural conditions and the building law do not allow it.
This is how it works with the property tax return
With the WISO tax program, the property tax declaration can now be made in no time at all. About FOCUS online you get the tax software for exclusive special price of only 26.99 euros. Normal price is 29.99 euros.
Own report to check the standard land value
The Taxpayers’ Association of Baden-Württemberg recommends checking in the specific case from Freiburg whether an expert opinion would be appropriate here. “If the value proven by an expert deviates by more than 30 percent from the value according to the expert committee, this lower value is used by the tax office,” says a statement for FOCUS online. However, it is difficult to estimate how the future real estate tax will look, taking into account a lower value according to an expert opinion. And the cost is borne by the owner.
“Lots of expert committees provide information on the use of their standard land values,” reminds the taxpayers’ association in south-west Germany. “For example, deductions are often recommended for large plots of land, which are expressly not provided for by the state property tax law.” Anyone who is unsure whether their property tax assessment notice is correct should definitely file an objection. The deadline is four weeks.
A model objection is available on the
Homepage of the Taxpayers’ Association of Baden-Württemberg
. With its help, affected taxpayers in the state can take action against their property tax assessment.
Property tax up by hundreds of percent – not only in Baden-Württemberg
But not only from real estate owners from Baden-Württemberg, where a test case is already pending at the tax court, the editorial department of FOCUS online received reports about property tax excesses, but also from other federal states. These people also reported increases of 200 percent or even 400 percent and more.
At least these women and men know what to expect. They gather information, get together, file an objection, prepare lawsuits. But one often hears in these conversations: “My neighbor doesn’t want to hear anything about the subject.” Or: “Many don’t even know what to expect.”
They will do so at the latest when the property tax assessment notice from the tax office arrives in the next few weeks and they draw the right conclusions from the property tax assessment amount. In many cases, the awakening may not be a very pleasant one.
Property tax unconstitutional in many federal states?
The constitutional lawyer Gregor Kirchhof, holder of the chair for public law, financial law and tax law at the University of Augsburg, even considers the property tax model of the federal government and Baden-Württemberg to be unconstitutional.
In an interview with FOCUS online, he emphasized: “There are two problems with the federal model: it is too complicated and it does not succeed in evaluating it in an equitable manner. In particular, the standard land values are too imprecise. And yet the assessment in the federal model and in Baden-Württemberg is based on these values.”
The tax offices are already complaining that a lot of other work is being left undone due to the flood of objections to property tax. But this is just the beginning. Because if there is one thing that the property tax reform has not succeeded in, then that is a fair simplification. Despite all the assurances, the system remains complicated.
The real estate owners who register with FOCUS online are not at all concerned about not paying property tax. Many would also agree to a moderate increase. Understandably, however, they do not want to pay an excessive penalty tax on property ownership.
