How to calculate the German property tax

What is property tax in Germany?

In Germany, property tax is a tax levied on the ownership of land and property. A distinction is made between Property Tax A and Property Tax B:

• Property Tax A (agricultural) applies to land used for agriculture and forestry.

• Property Tax B (built-up) applies to developed or developable plots of land and buildings.

In addition, the reform introduced Property Tax C: this allows municipalities to levy higher tax on undeveloped but developable plots of land, with the aim of reducing speculation in residential land.

Who pays property tax?

Usually, every owner of a plot of land in Germany must pay property tax to their municipality.

There are, however, exceptions where no property tax is due. For example, property owned by public law entities and used to provide public services can be exempt. The same applies to official residences of clergy and church employees belonging to religious communities under public law.

Private individuals, by contrast, generally have to pay property tax on their land or property.

How often is property tax due?

Owners often ask how frequently – and when – property tax must be paid. In most cases, property tax is payable every three months.

Alternative arrangements may be agreed with the responsible authority in specific cases.

Where the tax is paid quarterly, installments are typically due on 15 February, 15 May, 15 August and 15 November.

How is property tax calculated?

If you would like to calculate German property tax on your land or property yourself, you can use the following formula:

Property tax calculation using the value‑based federal model

The most commonly used model for calculating property tax in Germany is the value‑based federal model. In this model, the property tax value is determined based on several factors: the value of the land, the standardised land value (Bodenrichtwert), as well as the type, size and year of construction of the building.

The value‑based federal model is currently applied in the following federal states: Brandenburg, Mecklenburg‑Western Pomerania, Saxony‑Anhalt, Thuringia, Berlin, Schleswig‑Holstein, Bremen, North Rhine‑Westphalia, Saarland and Rhineland‑Palatinate.

If you own property in North Rhine‑Westphalia, you will find detailed information in our dedicated article Property tax calculation in NRW.

Property tax calculation using the area‑location model

The federal states of Hamburg, Lower Saxony, Hesse and Bavaria use the area‑location model, a value‑independent model, to calculate property tax. Here, the decisive factor for determining the property tax value is the size of the plot of land. In Lower Saxony, the location of the property is also taken into account in the calculation.

Further information can be found in our articles Calculating property tax in Lower Saxony and Calculating property tax in Bavaria.

Property tax calculation special cases: Saxony and Baden‑Württemberg

Baden‑Württemberg is a special case in the German property tax system. Here, a modified area model is used. The calculation considers the size of the plot of land and the standardised land value, while the type of building does not play a role. You’ll find more details in our article Calculating property tax in Baden-Wuerttemberg.

The second special case is Saxony. Saxony generally applies the federal model but uses different assessment rates.

Example: Calculating property tax

In our example, we look at a property in Cologne with a property tax value set at €150,000. As this is a developed plot with a residential building, the assessment rate in the federal model is 0.31 per mille. Cologne currently applies a municipal multiplier of 550%.

The calculation is:

150,000 €×0.31 per mille×550%=255.75 €

In this example, the annual property tax amounts to €255.75.

Do tenants have to pay property tax?

Property tax is not always borne solely by the owner. Tenants can also be indirectly affected.

Landlords are allowed to pass on property tax to tenants via the service charges (operating costs) and include it in the monthly ancillary costs. The proportion paid by each tenant is typically based on the floor area of the rented flat.