Church bodies are among the largest grantors of heritable building rights in Germany. Economically these land holdings matter more to many parishes than the church building itself — and they are regularly valued alongside it during restructuring.
What is being valued
Two rights must be distinguished: the Leasehold property held by the grantor, that is the church, and the heritable building right held by the builder. For church bodies it is almost always the land that is at issue, whose value follows not from the land value alone but from what the contract permits.
The four levers
- Ground rent. What governs is the rent actually agreed, not the market rate. Where it falls below — the rule with older contracts — this reduces the value of the land.
- Remaining term. The shorter it is, the closer the return of full control and the more the value approaches the land value.
- Adjustment clause. Whether and how the ground rent can be adjusted determines the quality of the income. Without an effective clause the rent is frozen for decades.
- Reversion provision. This determines under what conditions the right reverts early and what compensation is then payable.
A frequent point of dispute in older contracts
Many church heritable building right contracts date from the 1950s to 1970s. They contain ground rents that are very low measured against today's land values, and adjustment clauses whose effectiveness may be contested. For valuation the contract must therefore be examined in the original — information about the level of rent alone is not enough.
On redemption and extension
Where the redemption or extension of a heritable building right is pending, both sides of the calculation are needed: the value of the land in its encumbered state and its value once the encumbrance falls away. The difference is what is negotiated — which is precisely why it should be determined independently.
For church bodies, the procedure and requirements are described under Churches and church bodies.
For a deeper look: Market value of church buildings: How ecclesiastical properties are valued
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