Berlin Even after the deadline, millions of property tax returns are still missing. The rate of declarations received by the tax offices was 74.54 percent, as the Federal Ministry of Finance announced on Wednesday.
According to this, 64.72 percent of the expected tax returns were transmitted nationwide by January 31 via the electronic tax platform “Elster”. In addition, property owners submitted an estimated 9.82 percent of the declarations on a paper form.
As a result of the property tax reform passed in 2019, new methods for calculating property tax will take effect from 2025 – almost 36 million plots of land and real estate will have to be revalued.
The property tax brings a good 15 billion euros into the coffers of cities and municipalities every year and is therefore the most important source of income for the municipalities.
Because of the sluggish response, the finance ministers of the federal states had already extended the submission deadline by three months last year. Instead of October 31, 2022, taxpayers now had until January 31, 2023 to submit their declaration.
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On Tuesday, Bavaria was the only federal state to extend the deadline by another three months at short notice – and thus aroused the anger of the other federal states, who complained about going it alone.
Tax offices still tolerant for the time being
According to experts, the fact that so many taxpayers have not yet submitted their declaration is due to the fact that the procedure is complicated. Real estate owners have to gather the necessary documents themselves.
In addition, due to the reform, there are sometimes different property tax models depending on the federal state. Especially for those who own several plots of land and real estate in different federal states, the explanation is quite complicated, has been criticized.
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Taxpayers who miss the deadline do not have to fear fines for the time being. Anyone who submits their tax return in the next few days, which is still possible both electronically via the Elster portal and in paper form, can usually expect a certain tolerance from their tax office. The unedited explanations are currently piling up there anyway.
Anyone who continues to delay the declaration will receive a “reminder letter” from their tax office, according to several state finance ministries.
However, if you still don’t get to work, you face penalties. These real estate owners have to reckon with a late payment surcharge, which is determined by the local tax office. Specifically, there is a surcharge of 25 euros per month for delays and, under certain circumstances, a penalty payment of up to 25,000 euros.
Property owners who have understandable reasons why they cannot submit their tax returns on time have the option of applying for a longer filing deadline in order to avoid penalties.
Even if the real estate tax reform will only take effect in almost two years at the beginning of 2025, politicians and municipalities are putting pressure on the tax returns to be received now.
After receipt of the tax returns, the tax offices have to issue millions of tax assessments. This extra work causes an exceptionally high burden in the tax offices, says tax union boss Florian Köbler.
And after the decisions have been issued, it’s the local authorities’ turn. It is already clear that some property owners will have to pay higher property taxes in the future, such as those who live in good locations.
Some pay more, others less
However, politicians have promised that the reform should be “revenue-neutral” overall. The municipalities are therefore called upon to adjust their tax rates accordingly, i.e. to lower them as a rule.
Tax consultants and tax unionists therefore warn of chaos if too many tax returns are submitted too late. The tax offices would need time to process the many tax returns. And the municipalities should have enough time to discuss the new level of tax rates.
The reform of the property tax became necessary after a ruling by the Federal Constitutional Court in 2018. The property tax was calculated according to decades-old valuations, which led to unequal tax treatment, as the Federal Constitutional Court complained. As a result of the reform, the real estate tax is more closely based on the actual market value of a property.
However, the reform, which the then Federal Finance Minister Olaf Scholz (SPD) launched in 2019, was highly controversial. At that time, the states negotiated to be able to deviate from the federal property tax model if necessary. Five states made use of it, including Baden-Württemberg and Bavaria.
More: Fill out the property tax return yourself – what data you need and where you can find it