How did the Grundsteuer reform change property tax calculations from 2025 in Germany?

The Grundsteuer reform is the most significant change to German property tax in decades. It was triggered by a 2018 Federal Constitutional Court ruling that found the previous valuations, which were based on property values from 1964 (West Germany) and 1935 (East Germany), were unconstitutional because they violated the principle of equal treatment. A new valuation basis was required.

The new law took effect on 1 January 2025. All German property owners were required to submit a Grundsteuerwertfeststellung (property value declaration) to their Finanzamt in 2022, providing data on land area, property type, building size, year of construction, and rental income where applicable. The Finanzamt calculated a new Grundsteuerwert for each property based on this data. The federal model (Bundesmodell) applies to 11 states; the remaining states used their right under an opening clause to implement their own models.

The reform was meant to be revenue-neutral overall. However, individual taxpayers experienced significant changes: some saw their Grundsteuer rise substantially, others saw it fall, depending on how their property's relative value changed compared to the 1964/1935 baseline. Municipalities adjusted their Hebesatz (multiplier) to maintain overall revenue levels. Property owners received a Grundsteuerwertbescheid and a new Grundsteuermessbescheid from the Finanzamt. Objections to the assessed values had to be filed within one month of receiving the assessment notice.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.