Tax tip: New property tax

Have you already received the new property tax assessment notice for 2025? If so, you know the amount you have to pay by 17 February 2025 as the first of four annual instalments of your new property tax. Originally, the payment would have been due on 15 February, but as this day falls on a Saturday, the deadline has been postponed to the next working day.

But what should you do if you have not yet received the property tax assessment notice from your municipality? Does that mean you don't have to pay anything? The Property Tax Act provides clarity: according to Section 29, property owners are obliged to make advance payments until a new assessment notice is issued. These are based on the most recently assessed property tax. The aim of this regulation is to ensure the continuity of tax revenue for the municipalities. Even if the old advance payments are based on property tax values that are no longer permissible under constitutional law, they are still permitted.

The advance payments are based on the previous amounts and are later offset against the correctly assessed property tax, as stipulated in Section 30 of the Property Tax Act. This regulation also applies to federal states with their own property tax models. It is important to note that the municipalities can still change the assessment rate retroactively to the beginning of the year until 30 June of a year in accordance with section 25 (3) of the Property Tax Act. If a new property tax rate has not yet been set and there is no direct debit authorisation, you as a property owner must transfer the first instalment to the municipality in the amount of the last instalment paid in 2024. Failure to do so may result in a late payment surcharge of one per cent of the rounded amount in arrears.

Once the new property tax assessments are available, a distinction is made between two groups: those who will pay more after the reform and those who will pay less. Older residential properties in particular are often affected by considerable additional payments, as the previous standardised values were very low. Newer properties, on the other hand, may see relief.

What should you do if you realise that you have provided incorrect information, such as too much living space, and the objection period has already expired? The law allows such errors to be corrected at any time, but they will only be taken into account in the following year after notification to the tax office. Retroactive changes to the beginning of 2022 are only possible in the case of obvious inaccuracies, such as a typo or calculation error in the tax form. In the federal model and in Baden-Württemberg, however, errors are only taken into account if there is a reduction in the value of the property of at least 15,000 euros. In addition, a change can be made if the actual market value in the federal model is more than 40 per cent lower than the property tax value. In Baden-Württemberg, this already applies to a deviation of 30 per cent. In other state models that work with equivalent figures, it is unfortunately not possible to prove a lower value.