§ 194 BauGB (German Building Code) defines the concept of market value as an objective, market-oriented standard, thereby forming the central legal basis for every valuation in Germany.
The ImmoWertV specifies this definition through detailed provisions on the methods to be applied – sales comparison approach, income approach and cost approach – as well as on the consideration of special property-specific characteristics.
For tax purposes such as inheritance, gift, or property tax, the standardized valuation provisions of the Valuation Act (Bewertungsgesetz, BewG) apply in addition, which may methodically deviate from the market-oriented ImmoWertV procedures.
In addition to the BauGB, ImmoWertV, and the Valuation Act, depending on the occasion, provisions from the German Civil Code (BGB), for example regarding the equalization of accrued gains, or from the Foreclosure Act (Zwangsversteigerungsordnung) may also play a role.
Which legal basis applies in a specific case therefore always depends on the concrete valuation occasion – an appraisal report for inheritance tax purposes follows different requirements than one prepared for a private sale.
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