The property tax is a municipal tax that is levied on the property located in the municipality.
If you are the owner of a property, you have to pay property tax, the so-called property tax B. You will receive a property tax notice from the municipality.
The property tax is assessed in a three-stage procedure. The basis for the land tax assessment notice in the old federal states is the assessed value determined by the tax office in accordance with the Valuation Act based on the value ratios of 1964 and in the new federal states the assessed value determined by the tax office in accordance with the Valuation Act based on the value ratios of 1935. These values in turn form the basis for the land tax assessment amount, which is also determined by the tax office and set by means of an assessment notice.
The tax assessment amount multiplied by the assessment rate then results in the property tax to be paid.
In the new federal states, taxation is also to be carried out according to the substitute assessment basis for rented residential properties and single-family houses for which no standard value existed on 01.01.1991 and such a value could not be determined. In this case, the annual amount of the property tax is calculated on the basis of the residential or usable floor area. This is a tax registration procedure with the municipality.
The municipality sets the assessment rate by statute.
Changes in the legal or factual circumstances of the property only have an effect on property tax in the following year. For example, if you sell your property, the new owner will only be liable for property tax from the following year. Even if you build on your previously undeveloped property, you will not have to pay the increased property tax until the following year.
Under certain circumstances, you can be exempt from property tax. This is the case, for example, if you are a non-profit corporation and the property is used exclusively and directly for non-profit purposes. However, an exemption is usually not possible if the property is used for agricultural, forestry or residential purposes. You can apply for an exemption from property tax at the tax office.
In special cases, it is possible to waive the property tax. For example, if you own real estate whose preservation is in the public interest due to its importance for art, history, science or nature conservation, you can apply to the municipality for a waiver of the tax if the income generated is generally below the annual costs.