Property Taxes in Germany 2022

by Hartmut Obst on January 30, 2022 with 4 Comments

Real Property Taxes in Germany 2022

Every property owner has to pay property taxes in Germany. This means, he is liable to pay real property taxes (so called “Grundsteuer”). Moreover the tax rate depends on the type of property he owns. In other words the taxes are sorted into two distinct categories.

Real property tax “A”: Real property used for agriculture and forestry.
Real property tax “B”: Constructible real property or real property with buildings.

Real Property Tax Rate 2022

The real property tax burden in Germany is calculated by multiplying

the assessed value of the real property
the real property tax rate
the municipalmultiplier

So the assessed “real property Taxes in Germany 2022” value is determined by the tax authorities according to the German Assessment Code (Bewertungsgesetz). With this in mind, the German Assessment Code refers to historical property values which are usually significantly lower than the current market value.

If you need more details and insights of the actual high demand and market value of German properties, you can read our article: Buying a property in Germany – 6 Best Reasons for Foreigners.

Therefore the real property tax rate depends on the type of real property. As an example the tax rate is 2.6‰ (0.26 percent) for property used for (semi-) detached houses with a value of up to EUR 60,000. Further for all remaining houses the tax is 3.5 ‰ (0.35 percent); including commercially used real property.

Similar to the municipalmultiplier in the trade tax case, the municipalmultiplier to real property tax is stipulated by each municipality separately. Consequently municipalities determine a multiplier for both real property tax “A” and real property tax “B”. Usually the rate for “B” being much higher as you can see in our list.

Determining Burden of
Property Taxes in Germany 2022

To clarify the real property tax burden for a commercial building in a municipality with an average real property tax “B” collection rate of 350 percent:

Assessed Value	EUR 1,000,000 (e.g.)
x Basic property tax rate	x 0.35 percent
x Muncipial multiplier “B”	x 350 percent
= Property tax burden	= EUR 12,250

Real Property Transfer Tax

Therefore when domestic real estate is sold or changes the owner, a one-time real property transfer tax (Grunderwerbssteuer)of the purchase price is levied. In conclusion this means, real property transfer tax is usually paid by the buyer. Above all his tax rate varies from federal state to federal state in Germany.

In addition you can see the table below for actual property taxes in Germany.

Real Property Transfer Tax Rates in the Respective Federal States 2022

3.5%	Bavaria Saxony
4.5%	Hamburg
5.0%	Baden-Württemberg Bremen Niedersachsen Rheinland-Pfalz Saxony-Anhalt
6.0%	Berlin Hessen Mecklenburg-Vorpommern
6.5%	Brandenburg North Rhine-Westphalia Saarland Schleswig-Holstein Thuringia

In addition real property transfer tax also applies to a real property-owning partnership, if 95 percent of the shareholders change within five years. After that, if you need further details on property taxes in Germany you can follow this link to a good article from Wikipedia.

Or simple get in contact with us.

Questions and Feedback

Tu sum things up, what are your questions after this article or about property taxes in Germany? What are your experiences buying a property in Germany you can share with our readers? Please leave us a comment below – we appreciate it! Tell us what you liked or even what you would like us to add to this article or our site.

Looking forward to our exchange. If you just want to be inspired by some of our reference properties we sold in Germany feel free to take a look. Inspire Me!

4 Responses

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May 10, 2017 | Reply

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- Hartmut Obst
  
  May 17, 2017 | Reply
  
  Dear Joseph,
  thanks for reaching out. Please contact us via e-mail: contact@financial-services-ho.de
  Regards,
  Hartmut Obst
Vanessa

March 12, 2019 | Reply

Thanks for your article, it’s really helpful.
I have 2 questions left:
– Can the payment of the purchase price be somehow deducted from the taxes you have to pay for owing it or from the rental income?
– how can the depreciation be calculated? Is this regulated somehow or is it an individual decision?
Thanks a lot,
Vanesa
- Hartmut Obst
  
  March 18, 2019 | Reply
  
  Dear Vanessa,
  thanks for your question. If you buy a property that you want to offer for rent the answer is yes. You can deduct the interest rate and 2% per year of the sales price (without the part of the price, regarding the land) from your yearly monthly income.
  Of course German law especially the tax laws are quite complex and there are many more opportunities for tax deduction during the buying process and the rental phase.
  Just send us an e-mail (hartmut.obst@financial-services-ho.de) and I am happy to help. Hope we were able to provide you some useful information.
  Looking forward to our exchange.
  Kind regards,
  Hartmut

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I am an expert in real estate and property taxation, and my knowledge extends to the specific details outlined in the article "Property Taxes in Germany 2022" by Hartmut Obst. As someone deeply immersed in this subject matter, I can provide insights and additional information to enhance your understanding of the concepts discussed.

The article primarily covers the following key concepts related to property taxes in Germany:

Real Property Taxes in Germany (Grundsteuer):
- Every property owner in Germany is required to pay real property taxes.
- The taxes are categorized into two types: Real property tax "A" for agricultural and forestry land, and real property tax "B" for constructible real property or property with buildings.
Real Property Tax Rate Calculation:
- The real property tax burden is determined by multiplying the assessed value of the property, the real property tax rate, and the municipal multiplier.
- The assessed value is determined by tax authorities according to the German Assessment Code, which refers to historical property values, often lower than the current market value.
Municipal Multiplier:
- Similar to the trade tax case, municipalities in Germany stipulate a multiplier for both real property tax "A" and real property tax "B."
- The multiplier can significantly impact the overall property tax burden.
Burden of Property Taxes Calculation:
- The article provides an example of calculating the property tax burden for a commercial building based on the assessed value, basic property tax rate, and municipal multiplier.
Real Property Transfer Tax (Grunderwerbssteuer):
- When domestic real estate is sold or changes ownership, a one-time real property transfer tax is levied.
- The tax rate varies from federal state to federal state in Germany.
Real Property Transfer Tax Rates in Federal States (2022):
- The article presents the real property transfer tax rates for different federal states in Germany, ranging from 3.5% to 6.5%.
Additional Information:
- The article mentions that real property transfer tax also applies to a real property-owning partnership if a certain percentage of shareholders change within five years.

For those interested in detailed insights into the demand and market value of German properties, the article suggests reading another piece on "Buying a property in Germany – 6 Best Reasons for Foreigners."

If you have any questions or need further clarification on these topics, feel free to ask.

Property Taxes in Germany 2022 - GERMAN PROPERTIES (2024)