What does the property tax return actually do

Property tax reform ahoy: The burden of submitting a property tax assessment statement by January 2023 at the latest has fallen away from many of us. Nevertheless, the question arises as to what we can expect now. And what are the actual consequences for owners who have knowingly defied this order?

Hooray for the property tax reform: all German citizens who had a property in their name on 01.01.2022 had to address this issue for better or worse. The banal reason: the values used to date were based on data from 1964 in West Germany and 1935 in East Germany. In April 2018, the highest court ruled that the base data was not up to date and also led to unequal treatment of taxpayers. A reform was needed.

Amount of property tax only in January 2025

Now it's time to Wait and see. With 36 million properties in Germany, the authorities need a little lead time: owners will only find out the amount of the new property tax in January 2025. The so-called property tax value or property tax equivalent amount and the property tax assessment amount will be communicated in advance. Watch out here! These key figures should be checked as soon as they are submitted. If errors have crept into the data, an objection is essential. You only have one month to do so. If you need advice on this topic, a broker you trust will be happy to help you.

The letter with the official property tax assessment notice arrives at a noticeably later date. However, if they do not lodge an objection until then, the chances of turning things around in their favor are slim. The die is already cast.

Another reminder for sleepyheads

All those property owners who have not yet fulfilled their obligation to submit the declaration will receive a reminder letter. This is likely to flutter into the letterboxes of all oversleepers or stubborn refuseniks by the end of March or April. The state is trying the nice way once again: the letter contains their tax number and a deadline of another month.

On the other hand, property owners should not fret: After all, this income ensures that cities and municipalities can maintain the local infrastructure: roads, schools, playgrounds and hospitals are built and maintained with this money. Not a bad thing, really.

Understandably, some property owners fear that they will not be able to afford the future property tax costs. Older people in particular, with large properties in good locations, are increasingly seeing their hopes dwindle. This is understandable. After all, the cost of living and energy have risen significantly and who knows how high the property tax will be after the recalculation? The future is uncertain. Nevertheless, a functioning infrastructure is a good thing. If you keep this aspect in mind, as a property owner you are helping to improve local conditions. And making your own surroundings more liveable is a goal that everyone can identify with.

If you have any questions on the subject of property tax reform or need assistance in selling your property or finding a suitable domicile, please contact us!

Notes:

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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