The new property tax will apply from January 1, 2025. There were a number of stages to overcome on the way there: the independent expert committees of the municipalities had to determine the standard land values, the owners had to submit their property tax declarations and the tax offices had to issue the property tax value and property tax assessment notices. In order to be able to calculate the final property tax, one component is still missing: the local authority assessment rates. The local councils of the respective municipalities decide on the assessment rates for the 2025 property tax. Only then will it be finally clear how much property tax each owner will have to pay from 2025.
The property tax had to be reformed because the Federal Constitutional Court declared the previous assessment unconstitutional. In Baden-Württemberg, the legislator has chosen the so-called "modified land value model" for property assets ("property tax B").
The property tax for land is calculated as follows:
- 1. Determination of the property tax value:
For this purpose, the land area is multiplied by the respective standard land value. - 2. Determination of the property tax assessment amount:
For this purpose, the property tax value is multiplied by the statutory tax assessment figure. Among other things, properties that are predominantly used for residential purposes benefit from a 30 percent reduction in the tax base
The property tax value and the property tax assessment amount are determined by the tax office and communicated to the owners in a respective assessment notice.
The third and final step is still outstanding. This is where the local authorities come into play:
- 3. Determining and setting the property tax:
To do this, the property tax assessment amount is multiplied by the local authority's assessment rate. This ultimately results in the annual amount of property tax to be paid. This is communicated to the owners by their municipality in the property tax assessment notice
Property tax = property tax value (plot area x standard land value) x tax assessment figure x municipal assessment rate