Final sprint for property tax: Real estate owners only have until the end of January to submit their declarations – many millions still have to deliver. As a survey by the German Press Agency among the countries showed, the rate of statements made so far is currently in a range of around 60 to around 70 percent. Most of this was received electronically.
Nationwide, as of Thursday, around 65.5 percent of the declarations had been made, as a spokesman for the Federal Ministry of Finance said. About 56.9 percent were transmitted electronically, and an estimated 8.6 percent were received on paper. There has obviously been a sharp increase in returns in the past few days, as it was said in Berlin, for example. A spokesman for the North Rhine-Westphalia Ministry of Finance said that experience has shown that deadlines are often used as far as possible.
Deadline extended
In mid-October, the federal states had extended the submission deadline from the end of October to the end of January 2023 due to the slow receipt of the new property tax returns from the tax authorities.
There is no renewed deadline extension. Lower Saxony’s Finance Minister Gerald Heere (Greens), for example, said that this was not possible. The tax authorities must evaluate the majority of the properties by the end of 2023 so that the municipalities have the necessary basis for collecting property taxes from 2025 in good time. The NRW Ministry of Finance said that if the submission deadline were to be extended, the property tax revenue of the cities and municipalities by January 1, 2025 would be at risk. For the tax offices, the time still available to determine the property tax values is tight.
“The fact is that the financial administration is at its limit because of the property tax reform and the relief packages,” said Florian Koebler, federal chairman of the German tax union. “Any declaration not made creates extra work and keeps staff from doing what they are actually there for: ensuring tax justice and a level playing field.”
When the deadline expires, the tax offices will first send out reminders, as the Schleswig-Holstein Finance Minister Monika Heinold (Greens) said. The tax authorities then also have the option of levying surcharges for delays and penalties and making estimates. The Bavarian Ministry of Finance stated that the tax authorities would take account of late surcharges or, ultimately, estimates that property tax was a “new law”. The taxpayers’ association explained that every citizen can apply for an extension, including justification, individually at their tax office.
Nearly 36 million lots revalued
From 2025, the new property tax calculation will apply. The Federal Constitutional Court had demanded this, because the tax offices recently calculated the value of a property on the basis of completely outdated data, from 1935 in East Germany and from 1964 in West Germany. Almost 36 million properties now have to be revalued for the recalculation. The tax authorities need data from all owners, even if they only own an allotment. Usually it is about the land and living space, the type of building, years of construction and the so-called standard land value.
Property tax is one of the most important sources of income for municipalities. It is an annual tax on the ownership of land and buildings – but a landlord can also pass it on to the tenants via the utility bill. For most apartment owners, it is a few hundred euros a year, for owners of apartment buildings, on the other hand, it is often four-digit amounts.
How much property tax the individual owners will actually have to pay from 2025 will remain open for a while. Because that depends crucially on the so-called assessment rates of the municipalities. The “music” in the property tax plays in the municipalities, said Köbler. “In this context, I would like to remind you of the promises made by the municipalities that there should be no serious additional burdens for the citizens as part of the property tax reform.”
Land, house and apartment owners have been able to submit the declaration online since July 1, 2022. Shortly after the start, there were technical difficulties: the “Elster” tax software was temporarily paralyzed because many citizens wanted to call up the property tax page at the same time. The official tax language in the declarations does not make things easier either.
Taxpayers’ Association criticizes
The taxpayers’ association criticized the new property tax as being very complicated. “Because the required information depends on the property tax model of the federal states, a confusion was announced early on: Usually it is about parcel numbers, official areas, community names, district numbers, standard land values and the size of the living space. Here the owners of XXL bureaucracy from the start.”
Sibylle Barent, head of tax and financial policy at the Haus owners’ association, spoke of a “communication and technology disaster”.
