Property tax reform is progressing. Homeowners must now submit a new declaration of determination. This can cause a lot of effort.
Berlin – The new property tax is getting closer and sometimes causes a stir: the Calculation of property tax 2022. After a court decision a few years ago that the old calculation basis for the tax was not legal, the major reform of the property tax is currently underway.
There is a need to hurry: The revision must be completed by 2025, because the old calculation of the property tax will lose its basis on January 1st. Homeowners and Owners in Deutschland are already required: in the coming months they will have to submit a tax return on their property to the tax authorities. A lot of work is imminent, because every homeowner pays the property tax. As a rule, he passes them on to his tenants via the utility bill.
Real estate tax 2022: Calculation not easy – homeowners are faced with a new declaration of determination
That the Property tax 2022 reformed, has been driving consumer associations since the beginning of the year at the latest. Many of them saw myriad problems facing homeowners. And indeed: the calculation of the new property tax 2022 is anything but easy – especially since the federal states can deviate from the uniform federal model. Depending on the federal state, a different model can be used on the basis of which the new property tax for 2022 is based. Nevertheless, one thing is the same everywhere: a new declaration of determination must be submitted.
Three factors will continue to determine the level of property tax in 2022 in the future. Property tax value, tax index and assessment rate remain decisive. However, the biggest changes as a result of the current reform are for the property tax value. This stands for the value of a property in Germany. The federal model for the recalculation of property tax 2022 will be used in nine federal states: Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, Schleswig-Holstein and Thuringia. Meanwhile, privacy advocates fear because of the Property tax a big data chaos.
Property tax 2022: What information does the tax office need from owners in addition to the property tax return?
When around four million owners in Germany soon have to submit a tax return to their tax office because of the new property tax for 2022, the question will certainly arise as to what information the tax office needs from homeowners to recalculate the tax. The so-called assessment declaration, also known as the property tax return, can vary depending on the federal state. As the Federal Ministry of Finance informs on its website, the following information is required: location of the property, property area, standard land value, type of use, living space, year of construction of the building.
This is the property tax for 2022
It is considered the most important source of income for German municipalities: the property tax 2022. The reform ordered by the Federal Constitutional Court means that the basis for calculating the tax to the tax office, which all owners of property in Germany have to pay once a year, must be changed. The authorities have until 2025 to do this. Municipalities in particular benefit from the property tax: they receive around 15 billion euros a year from the income from the property tax.
A look at Baden-Württemberg shows how significantly the individual state models deviate from the data required for the federal model: According to the Ministry of Finance, only the file number, the property area, the standard land value and, under certain circumstances, the predominant use for residential purposes are queried. Information about the type of property, the living and usable area or the year of construction is not required.
Reform of the property tax: How will the property tax be composed in 2022?
As already mentioned, the property tax 2022 consists of three main components even after the reform: property tax value, tax index and assessment rate. Basically, the changes affect the property tax value, which now has to be recalculated. Depending on the federal state, important factors for the calculation of the new property tax can be the standard land value and the net cold rent. Depending on the federal state, other factors that can influence the amount of property tax are the type of property, the area of the property and the age of the building.
It is therefore difficult to make fundamental statements about how property tax 2022 will be composed in future. Due to the sometimes large deviations between the calculation models, it is therefore essential for owners in Germany to find out about the respective calculation regulations of the federal state. Calculate property tax 2022: all models of the federal states in the reform at a glance.
Calculation of the property tax 2022: Which models are there for the declaration of determination?
In addition to the federal model for calculating the 2022 property tax, the federal states were able to determine other calculation bases for the reform. While nine federal states fall back on the federal model for the declaration of determination, the other federal states have developed their own models, some of which show considerable differences. In Bavaria, for example, the surface model is used. Baden-Württemberg relies on a modified land value model.
There are also different models for calculating property tax in other federal states: Hamburg has developed a residential location model, Lower Saxony uses an area-location model and Hesse uses an area-factor model. The Free State of Saxony and Saarland are relying on the federal model with changed tax indicators for the new determination of property tax in 2022.
Property tax 2022 forms: New tax return – Elster is an important tool for data transmission
In order to collect the necessary data for the new property tax 2022, an additional tax return is required, which owners and homeowners must send digitally to the responsible tax office. The Elster portal is available for this purpose. As a rule, there is no longer any provision for a declaration of property tax in printed form. Exceptions should still be possible: Who can use them is still partially open and also depends on the respective federal state. The forms for the property tax 2022 can be viewed via Elster.
In the south-west of Germany, hardship is said to depend on whether a house does not have a computer with an Internet connection. Then the declaration for the property tax 2022 should also be able to be submitted in paper form.
Property tax C: This is the difference between property tax A and property tax B
As the Federal Ministry of Finance announced on its website, the Property tax reform 2022 also created a new property tax C. This is intended in particular to counteract speculation with building land. In some cases, land is only bought up to wait for an increase in value and then to sell the land again at a profit, it is said. This would prevent urgently needed housing from being created, especially in conurbations.
In the future, municipalities will be able to set a higher assessment rate for plots of land that are ready for construction but undeveloped. Property tax C is intended to make speculation more expensive and thus create financial incentives to actually create living space on plots that are ready for construction.
Recalculation of the property tax 2022: What is the standard land value?
In connection with the property tax 2022, the standard land value is reported again and again. This is essential for calculating the property tax value. The standard land value is an average price for a number of similar lots and is not to be confused with the land price. As a rule, the standard land value is determined by a committee of experts and given per square meter. The use of the property is irrelevant for the value. Normally, the respective municipality publishes the current standard land value for the property.
Property tax reform: When does the tax return for property tax 2022 have to be submitted?
For the property tax return, the legislator specifies a narrow time frame in which the declaration of assessment must be submitted to the tax offices. From July 1st to October 31st, homeowners and property owners in Germany have time to provide the necessary information for their tax returns. If the deadline is missed, the worst case scenario is that the data will be estimated.
The new property tax value is then determined using the data. However, it will take some time before this is actually applied: the key date is January 1, 2025. Until then, the original basis for calculating the property tax will remain valid. The current reform Property tax is not without criticism, especially because of the tax return: The taxpayers’ association tried to stop the new law with a lawsuit. The taxpayers’ association sees a violation of the principle of equality in the tax assessment based solely on the ground and soil.