Property Tax Reform 2026
How the new property tax affects your utility costs - and what you can do.
From January 2025
New property tax applies
~36 Million
Properties affected
~15 Billion EUR
Annual revenue
Calculation Models by Federal State
Model
Federal Model
Applied in
e.g. NRW, Berlin, Brandenburg
Calculation basis
Land value + Building + Rent level
Model
Bavaria (Area Model)
Applied in
Bavaria
Calculation basis
Only land and building area
Model
Lower Saxony (Area-Location)
Applied in
Lower Saxony
Calculation basis
Area + Location quality
Model
Hamburg (Location Model)
Applied in
Hamburg
Calculation basis
Area + Residential location (good/normal)
Winners and Losers
Likely More Expensive For
- -Apartments in prime inner-city locations
- -Large properties in sought-after areas
- -Old buildings in gentrified neighborhoods
- -Areas with strongly increased land values
Likely Cheaper For
- +Single-family homes in rural areas
- +Apartments in simple locations
- +New builds (previously often overvalued)
- +Areas with low land values
What Tenants Need to Know
Check Utility Bills
The new property tax will first appear in the 2025 bill (which you receive mid-2026). Compare with the previous year and ask about large deviations.
Adjust Advance Payments
If your landlord increases advance payments, it may be due to the new property tax. Ask for justification. The increase must be reasonable.
Property Owners: Check Your Assessment!
Many property tax assessments contain errors - wrong living areas, wrong construction years, wrong land values. Check your assessment carefully and file an objection within 4 weeks if there are errors. The deadline is important!
Frequently Asked Questions
When does the new property tax apply?
The new property tax has been levied since January 2025 and will first appear in utility bills for 2025 (which you receive in 2026). Property owners had to submit declarations by early 2023.
Will property tax be more expensive for everyone?
The goal was revenue neutrality - the same total tax amount. But there are winners and losers: Apartments in good locations often get more expensive, single-family homes in rural areas often get cheaper.
Can I pass property tax on to tenants?
Yes, property tax is generally transferable to tenants (Operating Costs Regulation). It appears in the utility bill. Only with all-inclusive rent is no transfer possible.
What can I do if the calculation is wrong?
Check the property tax assessment. You can file an objection within 4 weeks of receipt. Common errors: wrong living space, wrong location, wrong land value.
Does the calculation differ by federal state?
Yes! Bavaria, Hamburg, Hesse and Lower Saxony use their own models. The other states apply the federal model. The calculation bases vary significantly.