The value of the heritable building right essentially results from the building value, reduced or increased by the difference between the contractual ground rent (Erbbauzins) and the market-standard return on land value.
As the remaining term decreases, the value of the leasehold right (Erbbaurecht) declines noticeably, since the right of use is time-limited and, upon reversion (Heimfall), usually only compensation below the full building value is provided.
The specific contractual adjustment clauses for the ground rent (Erbbauzins), such as an indexation to the consumer price index, also have a direct impact on the value assessment.
Upon the so-called reversion (Heimfall) at the end of the contract term, the holder of the heritable building right usually receives compensation specified in the contract, which is often significantly below the full value of the building.
If, on the other hand, the heritable building right is extended in good time, the loss in value due to the decreasing remaining term remains limited, which is why the contractual extension options should be carefully examined during the valuation.
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