The property tax value and the market value are two independent value figures with different purposes: the property tax value is determined on a standardized basis in accordance with the Valuation Act (Bewertungsgesetz) for property tax from 2025 onwards, while the market value reflects the price actually achievable on the market. Both values can differ considerably from one another.
Two values, two purposes
Since the property tax reform, a property tax value is determined for every plot of land in Germany property tax value – the calculation method depends on the respective federal state (federal model or one of the state models, e.g. in Bavaria, Baden-Württemberg or Hamburg). The basis is always standardized, automatically processable factors such as the standard land value, plot area, building type and year of construction – individual characteristics of the specific property are not taken into account.
The market value is instead determined individually by us as valuers in accordance with § 194 BauGB and takes into account all value-relevant characteristics: condition, fittings, degree of modernization, noise or contamination burdens, third-party rights, and the actual market situation.
Why do the values often differ significantly?
Because the property tax value is deliberately calculated using standardized methods, it can be significantly below or above the actual market value depending on the property. Deviations of 20% or more are not uncommon, particularly for buildings in need of renovation, unusually shaped plots, or strongly fluctuating regional standard land values.
When is an individual appraisal report advisable?
Anyone who considers the value determined in the property tax value notice to be significantly too high can, under certain conditions, prove a lower fair market value and thereby have the assessment basis for the property tax corrected. An independent market value appraisal provides the robust basis for this – as it does for objections against the notice filed within the statutory deadline.
Conclusion
The property tax value and the market value should not be equated. For sales, inheritance, divorce, or financing, the individually determined market value is always decisive – the property tax value serves solely to calculate the annual property tax.
Please note: the content of this article is provided for general information only and does not constitute legal, tax, financial or investment advice. It is not a substitute for individual advice from a licensed lawyer, tax adviser or financial adviser. Despite careful research, we accept no liability for the accuracy, completeness or currency of the information provided. For specific legal or tax questions, please consult a qualified professional adviser.