VGermany’s currently largest data collection project began almost exactly six months ago: around 36 million owners of real estate and undeveloped land are asked to submit a property tax return. This was originally supposed to be done by the end of October, but after criticism of the effort involved, the deadline was extended to January 31, 2023. This date is now also approaching, and in many places more than every second explanation is still missing, as a survey by the FAZ among the state finance ministries shows.
In seven of the 16 federal states, less than 50 percent of the expected declarations were received by Wednesday. Mecklenburg-Western Pomerania brings up the rear with around 40 percent. Baden-Württemberg, Berlin, North Rhine-Westphalia and Saarland report response rates of between 45 and 46 percent. In Brandenburg it is 47.5 percent, in Saxony 49 percent. In other federal states such as Bavaria (50.5 percent), Hesse (52.9 percent) and Lower Saxony (54 percent), the numbers are somewhat higher; Bremen is currently the leader with 57 percent. But even there, the tax offices are still waiting for numerous explanations.
According to Hamburg’s Finance Senator Andreas Dressel, owners cannot hope for a further extension of the deadline: “There will be no further extension of the deadline,” he says. “Germany’s municipalities are dependent on the approximately 14 billion euros in revenue from property tax in order to maintain their municipal services even in times of crisis.” The Bavarian State Office for Taxes, which is responsible for the electronic tax platform Elster, refers to the time pressure on the municipalities: “The A significant part of the property tax returns must be processed by the turn of the year 2023/2024 so that cities and municipalities have enough time to set the new assessment rates and to send the property tax assessments for the year 2025,” says a spokeswoman.
The reason for the data collection is a decision by the Federal Constitutional Court from 2018. The judges called on the legislator to use more current property values for the calculation of the property tax. So far, the standard values in western Germany date from 1964, in the eastern federal states the data are even older. The property tax reform is to be “revenue-neutral”. However, in metropolitan areas where land prices have risen sharply, the burden is likely to rise significantly. Property tax must be paid by the owners, but it is apportioned to rented properties.
The information required for the property tax return depends on whether the federal state follows the federal proposal or uses the statutory opt-out clause for its own model. In many cases, the district, number of the parcel, size of the property, living space, year of construction and the standard land value must be specified. The latter can be researched on the Internet using the BORIS program; excerpts from the land register are required for other information.
Unofficial deadline extension
One could assume that the Federal Chamber of Tax Advisors is happy about the extra tax return. After all, the tax consultants make money from it. But President Hartmut Schwab is not in good spirits about the procedure. “It is time-consuming for everyone involved, and this effort could have been dispensed with. In principle, the administration has most of the data required to determine the property tax values. Unfortunately not in a bundle,” he says. “Therefore, taxpayers and their advisors must now collect and transmit this data.” The President of the digital association Bitkoms, Bernhard Rohleder, has criticized more than once that “the state uses its citizens to provide an administrative service”.
Even if there will be no official extension of the deadline, unofficially it definitely amounts to it. From Saarland it is said that defaulting owners are to be asked to submit the declaration in March with a “reminder procedure with a deadline of April 30, 2023”. The Berlin Finance Senate reports that a late payment surcharge will generally not be levied. Other federal states are putting gentle pressure on owners by pointing out that if there are no declarations, the tax offices can also estimate the value of the property.
