The lower the standard land interest rate, the higher the resulting income value, as future income streams are weighted more heavily – this is why it varies significantly depending on property type and location.
For well-let residential properties in sought-after locations, expert committees (Gutachterausschuss) frequently apply lower standard land interest rates than for commercial properties or properties in structurally weak regions.
Since the interest rate has a significant impact on the result, the expert committees (Gutachterausschuss) regularly publish updated values, which we use for our appraisal report.
The standard land interest rate differs methodologically from the general capital market rate, as it specifically reflects the long-term, land-related rate of return while taking value change risks into account.
For unusual or highly specific property types for which no specific property interest rate (Liegenschaftszinssatz) has been published, we must derive an appropriate value independently, based on sound professional judgment.
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.
