What Is Property Tax (Grundsteuer)?
Property tax is a recurring tax on land and buildings in Germany. It applies to residential, commercial, agricultural, and undeveloped properties. The tax revenue is used to fund municipal services like road maintenance, schools, and public facilities.
Why Is Filing a Property Tax Return Necessary?
In 2018, the German Federal Constitutional Court ruled the existing property tax system outdated and unconstitutional. A new system was introduced, requiring property owners to submit updated property information for reassessment.
The new property tax rules will take effect starting January 1, 2025, and require compliance from all property owners.
Key Information About the New Property Tax System
Standardized Valuation:
- Properties will be reassessed based on current market values instead of outdated valuations.
- Properties will be reassessed based on current market values instead of outdated valuations.
Regional Models:
- While most federal states use the federal model, some (e.g., Bavaria, Baden-Württemberg) have implemented their own models.
- While most federal states use the federal model, some (e.g., Bavaria, Baden-Württemberg) have implemented their own models.
Data Submission Requirement:
- Property owners must submit data to the tax authorities via the Elster portal (the official online tax filing platform in Germany).
Who Needs to File a Property Tax Return?
The obligation applies to all property owners, including:
- Private individuals
- Companies
- Co-owners of jointly owned properties
- Agricultural and forestry businesses
Steps to File a German Property Tax Return
Gather Required Information:
- Property details (address, size, type of use)
- Land registry information (“Grundbuchblatt”)
- Tax ID of the property owner
- Information about construction year, living space, and any extensions or modifications.
Access the Elster Portal:
- Register for an account on Elster if you don’t already have one.
- Digital filing is mandatory for the property tax return.
Fill Out the Relevant Forms:
- Complete the forms specific to your federal state. These usually include:
- General property information
- Usage details (residential, commercial, or mixed use)
- Building specifications
- You can contact us for further help and information.
- Complete the forms specific to your federal state. These usually include:
Submit the Return:
- After completing the forms, review and submit them through the Elster platform.
Receive Confirmation:
- Once the tax office processes your return, you’ll receive a notification of your property’s assessed value and the new property tax rate.
Calculation of Property Tax
Property tax is calculated as follows:
Property Value:
- Determined through the reassessment process under the new system.
Tax Base Rate (“Steuermessbetrag”):
- A fixed percentage applied to the property value.
Municipal Multiplier (“Hebesatz”):
- Set by individual municipalities and applied to the tax base rate.
Formula:
Property Tax = Property Value × Tax Base Rate × Municipal Multiplier
- Set by individual municipalities and applied to the tax base rate.
Deadlines for Filing
- The initial deadline for filing the new property tax return was October 31, 2025, but extensions may apply in some cases.
- Property tax is an annual obligation, with payments typically due quarterly.
Penalties for Non-Compliance
Failure to file a property tax return or provide accurate information can result in fines, late payment penalties, and potential legal consequences. It’s crucial to meet deadlines and ensure all data is accurate.