Quality date and valuation date: The two reference dates in every valuation

An appraisal report is prepared in August 2026. The value is to relate to the date of the testator's death in March 2019. In the meantime the loft has been converted, the heating system replaced and the garden redesigned. Which condition is to be valued – and which market situation is to be applied? The answer lies in the distinction between quality date and valuation date.

The ImmoWertV (German Real Estate Valuation Ordinance) governs these two points in time separately. Anyone who equates them without checking, or who states only one of them, produces an appraisal report that will be challenged at precisely this point in the event of a dispute.

Quality date and valuation date under the ImmoWertV

Section 2 (1) ImmoWertV separates the two levels explicitly: a valuation must be based on the general state of the property market as at the valuation date and on the condition of the property as at the quality date.

The valuation date is, under Section 2 (4) ImmoWertV, the point in time to which the valuation relates and which governs the determination of the general state of the market. Under Section 2 (2) ImmoWertV that general state of the market comprises the totality of circumstances relevant to price formation – the general economic situation, conditions on the capital market and the economic and demographic development of the area.

The quality date is the point in time to which the relevant condition of the property relates. Under Section 2 (5) ImmoWertV it corresponds to the valuation date unless, for legal or other reasons, the condition of the property at a different point in time is decisive. Section 2 (3) ImmoWertV lists what belongs to that condition as the property characteristics: state of development, type and extent of building use, actual use, contribution status, location characteristics, income situation, plot size and layout, soil condition – and, for developed properties, additionally the type of building, construction method, building design, quality of fixtures and fittings including energy performance, structural condition, year of construction as well as total and remaining useful life, together with property-related rights and encumbrances.

Section 194 BauGB, by contrast, names only a single point in time. That is not a contradiction: the provision links the price "at the point in time to which the determination relates" with the legal circumstances and the actual characteristics of the property. It is precisely this property-related dimension that the ImmoWertV specifies through the quality date.

How the two reference dates divide the work

The standard case: the two dates coincide

In the vast majority of engagements the valuation date and the quality date coincide. The property is valued in the condition it was in on the day whose market situation is applied:

• Purchase, sale and financing – the reference date is typically the day of the inspection or an agreed date.
• Inheritance and gift – for the purposes of valuation, Section 11 ErbStG makes the point in time at which the tax arises decisive, i.e. as a rule the date of death or the date on which the gift is made.
• Equalisation of accrued gains on divorce – Section 1376 BGB ties in with the commencement and the termination of the matrimonial property regime; for the final assets, the decisive point in time is therefore the date on which the divorce petition becomes pending. Further details in the article on the reference date for the equalisation of accrued gains.

One distinction is regularly confused in practice: the date on which the appraisal report is prepared is not itself a reference date – an appraisal report prepared in 2026 can relate to 2019 without difficulty. The retrospective valuation is an accepted standard case, for example years after the date of death.

In II R 1/18 the Federal Fiscal Court (BFH) made clear that even the valuation law to be applied is determined by the reference date and not by the date of the appraisal report.

Where quality date and valuation date diverge

The exception in Section 2 (5) ImmoWertV names two triggers: legal requirements and other reasons. Both occur in practice.

Divergence required by law

• Redevelopment area. Under Section 153 (1) BauGB, increases in value that have arisen merely from the prospect of the redevelopment, its preparation or its implementation are disregarded when assessing compensatory and indemnity payments – except to the extent that the party concerned lawfully brought them about through its own expenditure. Sentence 2 of the same provision simultaneously requires changes in the general state of the market to be taken into account. The separation can hardly be expressed more clearly: the condition is frozen at the state unaffected by the redevelopment, while the market level remains current.
• Expropriation. For compensation purposes, Section 95 (1) BauGB looks to the market value at the point in time at which the expropriation authority decides on the expropriation application. Subsection 2 excludes from this, among other things, changes in value resulting from the impending expropriation, as well as value-increasing alterations carried out after the proceedings were initiated or during a development freeze without the required consent.
• Land reallocation. For the plots to be allocated, Section 57 BauGB requires the market value as at the date of the reallocation resolution – for the plots contributed, by reference to their condition before the reallocation.

Divergence arising from the particular case

• Retrospective valuation after intervening changes. The classic case: modernisation, an extension, a loft conversion or partial demolition after the reference date. These measures have to be removed from the calculation; what is valued is the condition as it was then.
• Damage and defect cases. Here the hypothetical condition without the damage is often what matters, while current market conditions are applied.
• Anticipated future changes. Section 11 ImmoWertV permits future changes in the condition of the property to be taken into account where they are to be expected with sufficient certainty on the basis of concrete facts – with the likely time until they occur being appropriately assessed.
• Encumbrances with a time dimension. Rights of residence, usufruct or life annuities must be applied as they stood at the quality date, not as they stand today. On the methodology, see the article on rights of residence and usufruct.

How the value is derived where the dates differ

Methodologically, the valuation proceeds in two steps. First the condition of the property as at the quality date is established and documented – from building files, the land register, photographs, contractors' invoices, energy performance certificates, tenancy agreements or earlier appraisal reports. That condition is then valued using the market data of the valuation date.

The Ordinance provides its own instruments for bridging the gap in time. Index series under Section 18 ImmoWertV expressly serve to reflect changes in the general state of the market occurring over time. In addition there are historical standard land values, comparable prices from the period in question and the property yield rates published as at the reference date.

The decisive factor here is the principle of model consistency under Section 10 ImmoWertV: the data required for the valuation must be applied within the same model from which they were derived. A property yield rate taken from the 2019 property market report belongs with the management-cost and remaining-useful-life assumptions of that same model – not with those of 2026.

What a robust appraisal report must contain on this point

• both reference dates expressly stated, with dates – even where they are identical,
• the reasons given for why they coincide or diverge, citing the applicable provision or the particular feature of the case,
• the origin and time reference of all market data – reference date of the standard land value, survey period of the comparable prices, reporting year of the property yield rate,
• the evidence of the condition as at the quality date, together with an open statement of where the reconstruction rests on assumptions,
• where the valuation is retrospective: a finding of which structural changes occurred after the quality date and how they were removed from the calculation.

These particulars decide whether a market value report stands up before the tax office, a court or the opposing party. They are also the reason why the question of the validity of an appraisal report strictly speaking never arises: an appraisal report does not "go out of date"; it relates to a reference date.

Conclusion

The valuation date and the quality date are not a formality but the decisive setting of the course in every valuation. One fixes the market situation, the other the condition of the property. As a rule the ImmoWertV lets the two coincide, but for redevelopment areas, expropriations and land reallocations it requires them to diverge – and it permits divergence wherever the particular features of the case call for it.

For practice this yields a simple order of examination: first establish which purpose and which legal basis dictate the reference date; then check whether the condition at a different point in time is decisive; and finally select market data that match the valuation date and the chosen model. Anyone who makes these three steps visible in the appraisal report removes the ground from under the most common criticism of retrospective valuations from the outset.

The complete derivation, verifiable by third parties, is provided by the market value report.