faq
The tax offices are currently sending out the first notices of the new property tax. It will only be due in a year and a half. But many people fear that it will be more expensive for them. What to consider.
What can be expected with the first property tax notice?
The first decision does not yet indicate how high the new property tax will be. There is a summary of what you have reported to the tax office as real estate. Nevertheless, you should not file the letter unread, but carefully check again whether all the information reported to the tax office is correct: for example the area, the year of construction or the standard land value. If, for example, a property is in a nature reserve or a steep slope is classified as building land, you now have the opportunity to appeal. You have to do that within four weeks.
Why do many tax consultants always recommend objecting?
This is because you can only take action against the final property tax assessment if you have lodged an objection to this initial assessment. The municipalities are now beginning to set their so-called assessment rates – i.e. the factor that, together with the property value, determines the tax amount. If you leave the first decision unchallenged, you lose your right to later object to a property tax that may be too high.
when could that Right to object become relevant?
The new property tax will be due in a year and a half, i.e. from January 2025, for everyone, including tenants. Because landlords can pass the property tax on to the rent. The implementation will take place in the municipalities and they will probably set the final values by next spring – by then they will have processed all the contradictions. The notifications with the tax calculation will only be issued in the autumn of next year. Only then is it clear what you have to pay for. At least that’s the plan.
How many contradictions have there already been?
The vast majority of owners, 90 percent, have now submitted the declaration. There are now 36 million property tax returns at the tax offices. In some federal states, the offices have already processed the declarations in full and sent out their notifications. About three million people have objected so far.
How do the tax authorities deal with this?
As a precaution, some federal states have significantly increased their staff in view of the reform. Nevertheless, tax officials who otherwise have other tasks will probably have to step in in the property tax departments. This also applies, for example, to officials who normally check companies’ tax returns. This means that if these company audits can now be looked at less closely, this can ultimately cost tax revenue again.
Are many owners justified in fearing higher taxes?
Actually, the real estate tax reform should be designed “income-neutral” – that is, the municipalities should take on average just as much as before. For the individual, however, it can still be more expensive, because this requirement of revenue neutrality only applies on average. And it is actually not legally binding.
In view of the rising costs of the municipalities, for example for energy or salaries in the public sector, some therefore expect that the property tax reform will be used to compensate for these rising costs. A recent survey by the consulting firm EY has fueled such fears: a third of the municipalities there stated that they wanted to increase their assessment rates. At least there it should be more expensive.