In order to contain the corona pandemic, many shops had to remain closed for months in 2021.
(Photo: dpa)
Frankfurt The year 2021 was associated with financial losses for many commercial landlords because they received less rent. Due to the second lockdown, most retailers and restaurants had to close for months. Despite government help, some of them came under so much pressure that they were no longer able to pay their rent.
In addition, shortly after the end of the lockdown, there were floods in Rhineland-Palatinate, North Rhine-Westphalia and Bavaria. The flood damaged numerous houses. Some were even completely destroyed.
Bad luck for landlords, because they have to bear the additional costs in this case. After all, there is a tax relief for them. “Landlords are generally entitled to a partial waiver of property tax if they have suffered significant rental losses in the past year through no fault of their own,” according to the Haus & Grund Germany owners’ association. Up to 50 percent tax rebate is included.
The corresponding applications for 2021 can be submitted until March 31, 2022. Landlords must address the informal application to the municipal or city administration, in the city states the tax offices are responsible. The deadline cannot be extended. If the deadline is missed, the tax office decides at its own discretion whether to still grant the waiver.
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Property tax is one of the oldest direct taxes in Germany. All property owners must pay them. Municipalities set the amount.
Tax reduction depending on the amount of rent lost
The property tax waiver has not only existed since the Corona pandemic. Owners can always get a part of the property tax refunded if they have had significant rent losses through no fault of their own. This is regulated by paragraphs 32 to 34 of the Property Tax Act (GrStG).
“The real estate tax for rented properties is waived if the rental income is either more than 50 percent below the normal gross profit of a property or a property was completely non-profitable,” explains Haus & Grund. In the first case, 25 percent of the property tax is waived, in the second 50 percent.
In principle, there are many possible reasons for subsequent reimbursement: In addition to the tenant’s inability to pay, vacancy is also an option. It can also be caused by storms or other disasters. “Extraordinary events such as house fires or water damage, which lead to vacancy-related rents being filled, entitle a property tax waiver,” emphasizes Haus & Grund.
However, if the property is vacant due to planned renovation or conversion, the property tax cannot be reduced. The same applies if the landlord is jointly responsible for the loss of rent.
The landlord must not be responsible for the loss of rent
The Federal Court of Justice ruled that landlords are in principle not forced to offer their apartments below the usual rental price level or to make particularly costly and uneconomical rental efforts. However, unrealistically high rents should not be demanded.
“According to the case law of the Federal Fiscal Court, the rental efforts must be intensified, at least in the case of vacancies for several years, for example by hiring a broker,” informs Haus & Grund and advises that rental efforts should always be carefully documented.
>> Read here: Property tax reform 2022: This is coming to homeowners
In connection with the pandemic, the Federal Court of Justice also ruled that tenants are entitled to a rent reduction in the event of forced closures. If a landlord grants a rent reduction, he cannot reclaim property tax either.
In addition, landlords are only entitled to the property tax waiver if it is finally certain that the rent will not be paid. In the event of cancellations due to Corona, additional payments by the tenant are also conceivable. As a precaution, landlords should nevertheless submit the application for a property tax waiver. If the tenant pays later, the application was in vain. However, if he does not pay, only the person who submitted the application in time will receive the tax exemption.
More: Defaulting tenants reduce the tax burden: Landlords can save taxes with these tips.