The property tax will increase for many areas from 2025, in large cities surcharges of several hundred euros a year are conceivable. Apartment tenants must pay particular attention to four points so that they do not pay too much.
The property tax reform also affects tenants, because landlords are allowed to pass the property tax on to them with the ancillary cost settlement and do so almost without exception. If the property tax increases, the ancillary costs for tenants increase. In large cities and popular areas in particular, tenants could face significant additional costs as a result.
Tenants should find out in advance how the property tax in their region will change as a result of the reform and check whether their landlord is correctly passing the changes on to them. Five principles help with this.
According to the German Tenants’ Association, tenants in Germany pay an average of 18 cents in property tax per square meter per month. Tenants in an apartment with 100 square meters therefore cost an average of around 216 euros a year for property tax.
A sample calculation published by the Federal Ministry of Finance for Dresden shows how quickly changes can result in large amounts: For a rental apartment in Dresden East, the reform increases the property tax by around 70 euros per year (about a third more) for a single-family house in Dresden West by almost 200 euros (about three quarters more).
!function(){var t=window.addEventListener?”addEventListener”:”attachEvent”;(0,window[t])(“attachEvent”==t?”onmessage”:”message”,function(t){if(“string”==typeof t.data
Whether the Dresden example calculation can be applied to other tenants depends on the region in which they live. The property tax does not rise or fall uniformly throughout Germany as a result of the reform, but depends on the area.
The Federal Constitutional Court had declared the previous calculation of the property tax in 2018 to be unconstitutional because the decisive unit values, according to which properties were assessed, were outdated. The standard values should reflect the value of a house according to size, year of construction, location and similar criteria as precisely as possible. In West Germany they were from 1964, in East Germany from 1938. A lot has changed since then, and the standard values were way off the mark.
The property tax reform is intended to reflect these changes. However, because even neighboring regions have developed very differently in the past few decades, general predictions about changes in property taxes remain difficult.
As an approximation, tenants in popular metropolitan areas are more likely to pay more property tax from 2025 because their locations have increased in value. Tenants in the country tend to pay less.
!function(){var t=window.addEventListener?”addEventListener”:”attachEvent”;(0,window[t])(“attachEvent”==t?”onmessage”:”message”,function(t){if(“string”==typeof t.data
As a calculation by the Association of German Property Users (VDGN) shows, the property tax in Berlin-Kaulsdorf, for example, has almost tripled. Anyone who used to pay 200 euros there will soon be paying almost 600 euros. However, in Hohen-Neuendorf, which is directly adjacent to the capital, property tax will “only” rise by around 85 percent.
Municipalities decide how much of the property tax change reaches the tenants with the so-called assessment rates. These are multiplied by the property tax. If a municipality’s assessment rate is around 200 percent, property owners in their area pay double the property tax and pass this on to their tenants accordingly.
The federal government has urged cities and municipalities to compensate for tax changes by adjusting their assessment rates:
The sample calculation by the Ministry of Finance for Dresden shows why the assessment rates are so decisive: The assessment rate there is currently 635 percent. If the city lowers it to 490 percent, the tenants in the example from point 1 pay significantly less: the tenants of the apartment only three euros per year (plus one percent), the tenants of the single-family house only around 90 euros (plus around one third).
!function(){var t=window.addEventListener?”addEventListener”:”attachEvent”;(0,window[t])(“attachEvent”==t?”onmessage”:”message”,function(t){if(“string”==typeof t.data
Whether municipalities adjust their assessment rates is a free decision, despite the recommendation of the federal government. As soon as tenants know whether the property tax in their area is likely to rise or fall, it is worth checking the local press regularly or calling the town hall to find out how your own city or municipality is reacting to the change.
In large cities in particular, it seems questionable whether all municipalities will lower the assessment rates as much as would be necessary to compensate for rising property taxes: In Berlin-Kaulsdorf, for example, the assessment rate would have to drop from 810 to 280 percent. Similar drastic cuts would be needed in many areas. If, for example, the municipalities there only half go this way, many tenants still have hundreds of euros more for the real estate tax allocation in times of general inflation.
Tenants in Baden-Württemberg, Bavaria, Hamburg, Hesse and Lower Saxony should also note that their federal states deviate from the rules of the federal government.
From 2025, for example, Bavaria will calculate its property tax exclusively based on the area of a property, not on the yield. This saves tenants in popular locations money because the higher rents for their apartments are not included in the calculation. Tenants in areas with less demand pay more for this.
In order for landlords to calculate the property tax correctly, tenants should observe four principles.
Tenants can find out what proportion their apartment makes up of the total living space of the house in the ancillary cost statement or by asking the landlord and property management company.
The reform for the new property tax is complex – and this year it will require owners. You have to submit some data to the tax office. You have to be very precise and observe special deadlines. In our large guide you will find all the information you need to know in a compact form.
Since the new property tax will only apply from 2025, some detailed questions are still unresolved. One of the most important is likely to be the extent to which tenants are liable for the negligence of their landlords.
This is due to the fact that many landlords have so far left unanswered inquiries from the tax authorities to determine the new property tax. In Berlin, only slightly more than a third of property and apartment owners have completed their declarations. Many other federal states report rates of between 40 and 50 percent. By the time the deadline for submissions expires at the end of January, a large proportion of those affected will probably still have left their duty unfulfilled.
In the worst case, it will be expensive for these landlords because the tax authorities estimate their tax burden with security surcharges. It is still unclear to what extent the landlords can then pass on the property tax to their tenants. However, it seems unlikely that they will be allowed to do so in full.
Submit property tax return 2022 – Here’s how – with and without Elster
Other exciting topics:
In France, concrete preparations have been made for a possible regional interruption of the power supply in the event of supply bottlenecks in winter.
Real estate heirs face higher inheritance and gift taxes of 30 to 40 percent. If you are unlucky enough to slide into a higher tax bracket due to the new valuation rules, the inheritance or gift tax can even multiply in extreme cases!
