Property owners must 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 will require around 36 million properties to be revalued. According to the Federal Ministry of Finance, property owners of residential properties must provide their tax office with information on the location of the property, the plot area, the standard land value, the type of building, the living space and the year of construction of the building. The declaration of assessment can be submitted via the ELSTER tax platform from July 1, 2022.
The property tax reform comes about because the current property tax is based on property values that are decades old. Properties in the west are assessed according to their value in 1964, while properties in the east are assessed according to their value in 1935. These values are used to determine the assessment rate and therefore the property tax. However, the different developments in property values lead to 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 the standard valuation for calculating 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 their citizens with fire departments and hospitals. The amount of property tax is not set uniformly, but varies from municipality to municipality based on the assessment rate. The Haus & Grund property tax ranking 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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