In the property tax saga of Bavaria, a whopping 97% of property owners HAVE FINALLY handed over their declaration, according to the Bavarian State Tax Office. This update came after multiple deadline extensions, as reported by Mediengruppe Bayern on a Monday.
The tax office had already dispatched most of the notices, it announced. Thus, if property owners in Bavaria receive a notice suggesting a substantial hike in property tax, the next step would involve municipalities mulling over a potential adjustment in assessment rates. The Bavarian state government, as per the official, aims to keep property tax revenue at its pre-reform level post-reform.
However, the municipalities retain autonomy in deciding assessment rates. The Property Tax Act does not impose any minimum or maximum percentage for the assessment rate, according to the spokesperson from the state office.
From 2025, property tax calculation in Bavaria will shift to a new basis, following a ruling from the Federal Constitutional Court that deemed the previous method unconstitutional. Given that the federal model was considered too bureaucratic, Bavaria is rolling out its unique model, which relies solely on the property's area. Post-reform, property tax revenue will continue to remain with the local authorities.
It's crucial for those in Bavaria who haven't submitted their property tax returns yet to act swiftly to avoid late fee penalties. Additionally, homeowners should be aware of the upcoming property tax reform and its implications, which involves a complete overhaul of tax obligations and rates. Consultation with a tax advisor can help ensure compliance with all regulations and help take advantage of any available exemptions or deductions.
Property owners in Bavaria should note the following after 2025:
- Deadline: Property owners in Bavaria have until July 31 of the year following the tax year to submit their German property tax return. If using a tax advisor, the deadline is extended until July 31 of the following year.
- Tax Obligations: Property owners in Bavaria are required to file a German tax return if they earn income from their property, with non-residents subject to a personal levy on derived income.
- Tax Rates: Property transfer tax rates in Bavaria stand at a low 3.5%, making it the lowest among federal states in Germany. Real property tax rates vary by location and depend on factors like size and location.
- Capital Gains Tax: If a property owner sells their main residence in Bavaria after residing there for at least two complete years, they may be eligible for capital gains tax exemptions up to €250,000 (singles) or €500,000 (married couples or civil partners), provided certain conditions are met.
