Property owners will have to submit a declaration of assessment between Friday, July 1, 2022, and Monday, October 31, 2022. The reason for this is the property tax reform, which comes into force on January 1, 2025, and as a result of which around 36 million properties will have to be reassessed. According to the Federal Ministry of Finance, owners of residential properties must provide their tax office with information on the location of the property, the property area, the standard land value, the type of building, the living area and the year of construction of the building. The assessment declaration can be submitted via the ELSTER tax platform from July 1, 2022.
The reason for the real estate tax reform is that the previous real estate tax is based on decades-old property values. Land in the west is assessed according to its value in 1964, while land in the east is assessed according to its value in 1935. These values are used to determine the assessment rate and thus the property tax. Due to the different developments in land values, however, there is unequal tax treatment of properties that are comparable with each other. According to a ruling by the Federal Constitutional Court on April 10, 2018, these previous regulations on unit valuation for assessing property tax are therefore unconstitutional.
Property tax is an important source of income for cities and municipalities, for example for school and road renovations, the construction of playgrounds, and to provide fire departments and hospitals for their citizens. The amount of property tax is not set uniformly, but varies from municipality to municipality based on the assessment rate. The property tax ranking of Haus & Grund shows that there are considerable differences in property tax B in the largest German cities: While the assessment rate in Gütersloh is 381 percent (1st place; annual property tax: 323 euros), in Witten it is 910 percent (100th place; annual property tax: 771 euros per year).
Sources: bundesverfassungsgericht.de/1 BvL 11/14, 1 BvR 889/12, 1 BvR 639/11, 1 BvL 1/15, 1 BvL 12/14/iwkoeln.de/bundesfinanzministerium.de/rsw.beck.de/mdr.de
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