Taxes in Europe Database v2
Legal basis for the imposition of real property tax is the Real Property Tax Reform Act of 7 August 1973 (Federal Law Gazette 1973 I p. 965), last amended by Article 38 of the Act of 19 December 2008 (Federal Law Gazette 2008 I p. 2794).
Federal Republic of Germany.
Taxpayer is the one to whom the assessed value according to the Valuation Act is attributed.
As an impersonal tax, real property tax has as its object the economic units of real property as described in section 2 of the Real Property Tax Act (Class A real property tax for agriculture and forestry businesses and Class B real property tax for real estate). The tax applies to these irrespective of the taxpayer’s personal circumstances or personal ability to pay.
Real property tax is calculated in three separate consecutive steps. These are the procedure to determine the assessed value; the procedure to determine the relevant value, which is based on the assessed value; and the procedure to determine the tax due, which uses the relevant value as an input.
The starting point is as follows:
Notably exempt from real property tax is real property owned by public authorities, the Churches and benevolent or welfare institutions.
The computation of real property tax from the assessed value or adjusted economic value requires two operations.
The tax office determines from the relevant value the basic tax, this information being passed on to the municipality in question. The basic rates that are applied to the assessed value or adjusted economic value to obtain the basic tax are as follows:
Under Article 106 paragraph 6, second sentence, of the Basic Law, municipalities must be allowed to determine the rates at which real property tax is levied. The municipality therefore applies to the basic tax a multiplier fixed by its council and determines the tax by issuing a tax notice. In the new Länder, real property tax is sometimes still calculated in a simplified procedure at a flat rate according to the substitute assessment basis of residential or usable area and collected by means of provisional returns (Section 44 of the Real Property Tax Act). As the municipalities are free to fix the multiplier as they see fit, the tax burden may differ to a greater or lesser degree from one municipality to the next. In 2013, the average municipal multiplier amounted to 316% (2012: 311%) for Class A real property tax (agricultural and forestry establishments) and 436% (2012: 425%) for Class B (other real property).
In principle, the taxpayer is obliged to make quarterly payments on 15 February, 15 May, 15 August and 15 November.
The revenue from real property tax accrues solely to the municipalities. Many municipalities combine the imposition of real property tax with the collection from property owners of utility charges such as those for garbage disposal, street cleaning and drainage.