Property Tax Reform 2026 in Germany: New Grundsteuer Explained
The new property tax applies since January 1, 2025, and will appear for the first time in your 2025 utility bills (which arrive mid-2026). If you own, you pay directly. If you rent, your landlord covers it but can pass it to you through operating costs, only if your lease allows it.
Updated: · By: Checkalle Editorial
Key Takeaways
- Effective January 1, 2025: Based on property values as of January 1, 2022.
- Three notices: Value assessment (Wertbescheid), tax calculation (Messbescheid), and final bill (Grundsteuerbescheid).
- Five state models: Bavaria, Hamburg, Baden-Württemberg, Hesse, Lower Saxony calculate differently.
- For renters: Passes through as operating costs only if your lease permits it, proportional to your flat size.
- Appeal deadline: One calendar month from notice date, not four weeks (§ 355 AO).
From Jan 1, 2025
New property tax in effect
~36 million units
(BMF, Destatis)
~€16 bn revenue
2024 (Destatis)
Buying a property in 2026? Mortgage costs likely outweigh property tax. Financing options for foreigners →
Why the Reform Exists
Germany's old property tax system was based on land values from 1964 (west) and 1935 (east). In 2018, the German Constitutional Court (BVerfG, case numbers 1 BvL 11/14, 1 BvR 889/12, 1 BvR 639/11) ruled this violated the principle of equal treatment. Identical properties in the same city could be taxed completely differently.
The court gave lawmakers until the end of 2019 to fix the law, and until the end of 2024 to determine new values. On January 1, 2025, the new system took effect.
The reform was meant to be revenue neutral, so the government collects roughly the same total amount as before. Within that total, the burden shifted. Some properties pay more, some less.
How Property Tax Is Calculated 2026
The formula is the same across Germany. Only the numbers change depending on your state and location:
Property value × Tax rate × Municipal multiplier = Annual property tax
The Three Notices You'll Get
- Grundsteuerwertbescheid (Value assessment) from the tax office: Tells you the official property value.
- Grundsteuermessbescheid (Tax calculation notice) from the tax office: Multiplies the value by standard tax rate (usually 0.31‰ for residential).
- Grundsteuerbescheid (Final bill) from your municipality: Multiplies the calculated amount by your town's Hebesatz (multiplier). This is what you actually pay.
Worked Example (NRW)
| Property value (from Finanzamt) | €250,000 |
| × Tax rate | 0.31‰ |
| = Tax base (Messbetrag) | €77.50 |
| × Municipal multiplier | 600% |
| = Annual tax | €465 |
If you lived in Hamburg (multiplier 975%), you'd pay €755. If in Munich (510%), you'd pay €395.
5 State Models Compared
Eleven states use the federal model above. Five broke away with their own systems. Identical properties in different states can have very different tax bills.
| State Model | States | How It Works |
|---|---|---|
| Federal Model | 11 States (e.g., NRW, Berlin, Brandenburg, Bremen, Mecklenburg-Vorpommern, Rhineland-Palatinate, Schleswig-Holstein, Saxony-Anhalt, Thuringia, Saarland, Saxony) | Property value + rental level + location |
| Pure Area Model | Bavaria | Only land and building area, no value |
| Modified Soil Value Model | Baden-Württemberg | Soil value × area (building condition ignored) |
| Location Model | Hamburg | Area × location factor (good vs. normal) |
| Factor Method | Hesse, Lower Saxony | Area × location quality factor |
Hebesatz 2026 in Major Cities
Each municipality sets its own Hebesatz (multiplier). It ranges from 100% to 975%. Here's what major cities charge for a €250,000 property:
| City | Hebesatz B (Residential) | What €250,000 Costs |
|---|---|---|
| Hamburg | 975% | €755 |
| Berlin (varies by district) | ~830% | ~€643 |
| Cologne | ~550% | ~€425 |
| Munich | ~510% | ~€395 |
| Frankfurt | ~440% | ~€340 |
Find your local Hebesatz and land value: Use BORIS-D, the free official German portal. As of January 1, 2022 is the assessment date.
Winners and Losers
Pay More
- • Apartments in prime city-center locations with high land values
- • Properties in gentrified neighborhoods where land prices rose
- • Buildings in sought-after areas like Munich or Hamburg
- • Properties with significantly increased market values since 1964/1935
Pay Less
- • Single-family homes in rural or remote areas
- • Apartments in less desirable locations
- • New buildings often overvalued under old system
- • Properties in areas with stable or declining land values
What Tenants Need to Know
Your landlord can pass property tax to you only if your lease explicitly permits it. If it does, it appears in your annual operating cost settlement. Your share is roughly proportional to your flat size in the building.
You have 12 months to object to the settlement under § 556 BGB.
Check Your Bill
The new property tax appears for the first time in your 2025 operating cost bill (arriving mid-2026). Compare with 2024. Big jumps? Ask your landlord for the Grundsteuerbescheid.
Verify the Math
Your share should match your flat's percentage of the building's total area. You can demand to see documents under § 556 BGB. You have 12 months to object.
Example: A 4-family building faces €1,600 per year in property tax. Your 80 m² flat is in a 400 m² building (20% of total space). Your share: €320 per year, or about €27 per month. If you need additional cash for unexpected housing costs, a personal loan for foreigners may help bridge temporary gaps.
How to Appeal (4-Step Process)
You have one calendar month from receipt of the notice. Not four weeks, not 28 days. This distinction is legally significant under § 355 AO. If your deadline is November 10, file by December 10, not November 24.
Check your assessment via BORIS-D
Is living area correct? Building date right? Land value realistic? Hebesatz matching your city's published rate? Use the free BORIS-D portal to check standard land values for your address.
Pick the right notice to challenge
Value error (Wertfehler) goes to the tax office (Finanzamt). Hebesatz or calculation error goes to your municipality (Gemeinde). Filing to the wrong office wastes time.
File within ONE MONTH per § 355 AO
One calendar month from receipt. Not four weeks, not 28 days. Write a letter stating what's wrong. Send certified mail. Include evidence. Optional: request suspension of collection while your case is open.
Hardship relief if applicable
If the property is generating a loss, you may qualify for relief under § 33 GrStG. This is a separate process from an objection but can happen in parallel.
December 2025 ruling: Germany's Federal Tax Court (BFH) ruled that the federal model is constitutional (cases II R 25/24, II R 31/24, II R 3/25). Appeals based purely on "this is unconstitutional" now have almost no chance. But appeals based on factual errors (wrong area, wrong land value, calculation mistakes) remain strong and often succeed. Check the BFH Grundsteuer page for details.
Key 2026 Numbers
- About 36 million properties were reassessed on January 1, 2022 (BMF, Destatis)
- €16 billion annually collected from property tax in 2024 (Destatis press release)
- One calendar month deadline to object, measured from the day you receive the notice (§ 355 AO)
- Hebesatz range: 100% to 975%, set by each municipality
- 5 states broke away from the federal model: Bavaria, Hamburg, Baden-Württemberg, Hesse, Lower Saxony
FAQ
When exactly does the new tax apply?
January 1, 2025. The assessment date was January 1, 2022. Your property's 2022 condition and value determine your tax. Changes since then don't matter for this round.
Why is my tax so much higher or lower than my neighbor's?
Location, size, and your state's calculation method. Two identical houses on opposite sides of a city border can have very different taxes. This is intentional.
Can I see my Bodenrichtwert (standard land value)?
Yes. Go to BORIS-D and search your address. It's free and public.
My landlord wants to increase my rent because of the new property tax. Is that allowed?
No. Your landlord can only raise rent under specific legal conditions. Ask a tenant rights organization if you're unsure.
What if I can't afford to pay?
Contact your local tax office (Finanzamt). Hardship relief (§ 33 GrStG) exists if you can prove the property is generating a loss. Payment plans may also be available.
Can I file my objection in English?
Yes. German tax offices must accept objections in English under EU law. A German translation doesn't hurt and speeds up the process.
Where can I find an English-speaking tax advisor in Germany?
Look for "Steuerberater" (tax advisor) in your area. Many accountancy firms in Berlin, Munich, Frankfurt have English-speaking staff. Expect 100–300 EUR for an objection review.
What if my landlord abroad didn't pay property tax?
The government collects from the owner, not the tenant, for unpaid property tax itself. Contact a tenant rights organization (Mieterbund) if there's a dispute.
What You Can Do Now
If You Own
1. Check BORIS-D for your address. Verify land value, area, Hebesatz.
2. Review Grundsteuerwertbescheid and Grundsteuerbescheid when they arrive.
3. Calendar the one-month deadline. Mark it in your phone.
4. If there's an error, file objection immediately. Don't wait.
If You Rent
1. Check your 2025 operating cost bill (mid-2026) for property tax line.
2. Ask landlord to show Grundsteuerbescheid. You have the right.
3. Verify the math. Your share should match your percentage of building area.
4. Keep records. If you object, you'll need proof of charges.
If You're Buying
1. Factor property tax into total cost of ownership.
2. Ask seller or agent for Grundsteuerbescheid.
3. Use BORIS-D to check land value and Hebesatz for the area.
4. Compare financing options. Monthly mortgage usually outweighs tax.
Want more 2026 changes?
Property tax is just one of several new laws and benefits in 2026.
View All Germany Changes 2026Legal Disclaimer: This article is general information about the German property tax reform and is not legal or tax advice. Laws change, and individual circumstances vary. If you need specific guidance on your property tax assessment or objection, consult a qualified tax advisor (Steuerberater) or lawyer. The information was accurate as of May 18, 2026.