No property tax return: 135,000 cases estimated

Because of missing property tax declarations, the tax offices in Saxony had carried out around 135,000 estimates by the end of November. In a few cases still to be processed, further estimates were carried out, the Ministry of Finance announced on request.

Because of the property tax reform that came into effect this year, owners of real estate and land were required to submit a property tax return by the end of January 2023. Anyone who did not submit their return on time received a reminder letter. A late submission may result in a late surcharge being imposed. If the declaration is not submitted at all, the tax offices estimate the basic value.

Almost 600,000 appeals

According to the Ministry of Finance, a total of just over 1,673,000 property tax assessments have been issued in Saxony to date. Almost 600,000 appeals have been lodged against these. In around 46,700 cases, the objection was upheld and in around 10,900 cases the decision was either completely or partially negative. In addition, 77 appeals against the tax office's decisions are pending.

Property tax is one of the most important sources of income for local authorities. It is levied on real estate and is payable exclusively by the owners. In the case of rentals, owners can pass on the property tax to tenants via the operating costs. In Saxony, the most recent revenue was around 535 million euros.

Property tax to be recalculated

A new property tax calculation has been in place since the beginning of the year. This was demanded by the Federal Constitutional Court, as the tax offices were previously calculating the value of a property on the basis of completely outdated data - in East Germany with values from 1935 and in West Germany from 1964. Property owners had to submit property tax returns for the new calculation.

The property tax is then usually calculated using a multi-stage model. Based on the property tax return, the tax office calculates the property tax value of a property. This is followed by a property tax assessment notice.

The tax office uses this notice to calculate the property tax assessment amount, which is also determined by a notice. This amount is then multiplied by the respective assessment rate of the municipality to calculate the property tax.