The new “ Grundsteuer ” has been in effect since January 1, 2025. There were several steps to complete along the way: the municipalities’ independent appraisal committees had to set the standard land values, property owners had to file their property tax returns, and the tax offices had to issue the property tax assessment notices and property tax assessment decisions. To calculate the final “ Grundsteuer,” the municipalities’ assessment rates were ultimately needed. In principle, the local municipal councils of each municipality decide on these assessment rates. This information is then used to calculate how much “ Grundsteuer ” each property owner will have to pay starting in 2025.
Grundsteuer had to be reformed because the Federal Constitutional Court declared the previous valuation method unconstitutional. In Baden-Württemberg, the legislature opted for the so-called “modified land value model” for real property (“Grundsteuer B”).
In rulings dated April 22, 2026, the Federal Fiscal Court upheld the State Property Tax Act ( Baden-Württemberg ). In the court’s view, the modified land value model is constitutional. The court considers it permissible for the Grundsteuer B to base the property tax assessment solely on the land area and the standard land value. Simplified rules are generally permitted in a mass assessment procedure such as the Grundsteuer.
Grundsteuer for real property is calculated as follows:
- 1. Determination of the property tax value:
To do this, the land area is multiplied by the applicable standard land value. - 2. Determining the property tax assessment base:
To do this, the property tax value is multiplied by the statutory tax assessment rate. Among other things, properties used primarily for residential purposes benefit from a 30 percent reduction in the tax assessment rate.
The property tax value and the property tax assessment base are determined by the tax office and communicated to the owners via a respective notice.
In the third and final step, the municipalities come into play:
- 3. Calculation and determination of the Grundsteuer:
To do this, the property tax assessment base is multiplied by the municipality’s assessment rate. This ultimately results in the annual amount of property tax ( Grundsteuer) to be paid. This amount is communicated to property owners in the property tax notice issued by their municipality.
Grundsteuer = Property tax base (property area × standard land value) × tax assessment rate × municipal tax rate