Property tax reform: Recommendations for new assessment rates by summer

Property tax reform: Recommendations for new assessment rates by summer

As part of the upcoming legal changes to property tax from next year, the Hersfeld-Rotenburg tax office has already sent notifications of the new property tax amounts for 94.2 percent of the total 66,741 economic units in the district. According to Marco Erb from the Frankfurt Finance Directorate, this corresponds to the Hessian average. This percentage also includes cases in which the tax office had to estimate due to missing owner declarations. The deadline for submitting the required information on year of construction, living space and standard land values ​​was extended from October 31, 2022 to January 31, 2023, with the response rate for the information across Hesse being over 98 percent.

Although the tax administration does not provide a detailed list by district, 9.9 percent of the notices nationwide were contested with objections. There is no statistical evaluation of the new measurement amounts compared to the previous calculation at district level. Overall, the property tax reform should be revenue-neutral for the municipalities, meaning that the annual total should neither increase nor decrease. In the summer, the tax administration will send all cities and municipalities individual recommendations for adjusting the assessment rates and publish them on the Internet. These recommendations are based on a comparison of the volume of the new measurement amounts with those under the old law as of January 1, 2022.

The decision on the specific assessment rates ultimately rests with the respective local parliaments. The spokesman for the mayors in the district, Thomas Rohrbach from Niederaula, emphasizes the relevance of reliable figures from the tax office by the summer so that the municipalities have enough time to determine the new assessment rates and take them into account in budget planning for 2025. Due to possible changes as a result of the reform, information on the new levy level should be available to owners as early as possible.

The Federal Constitutional Court had classified the previous calculation of the property tax in 2018 as unconstitutional because it did not correctly reflect the actual value development of land and real estate. The calculation of standard values ​​in the old federal states goes back to 1964, while in the new federal states it is even based on data from 1935. The reformed property tax is scheduled to come into force from 2025.