date | theme

03. January 2022 | Property tax reform 2022: what is new?

03. February 2022 | The new property tax in Bavaria from 2025

04. February 2022 | Property tax in Baden-Württemberg from 2025

07. February 2022 | Property tax in Saarland from 2025 (this contribution)

08. February 2022 | Property tax in Saxony from 2025

10. February 2022 | Property tax in Hessen from 2025

11. February 2022 | Property tax in the Hanseatic City of Hamburg from 2025

14. February 2022 | Property tax in Lower Saxony from 2025

The Saarland provides for a different collection of property tax in its territory from federal law. However, this is exclusively concerned with adaptations to the control measurement numbers provided for different evaluation objects. Because of the adjustments, which took place in parallel with the property tax reform also in the valuation law, the Saarland state government intended to increase the tax figures somewhat. In all other points, however, the Saarland leaves the taxation regulations to the federal law. Thus, the new property tax in Saarland should only be incurred from 2025. But as early as 2022, taxpayers in Saarland and elsewhere are obliged to submit a tax return to determine the property tax values.

The property tax was for a long time a tax that both land and other property owners were obliged to pay, as well as agricultural and forestry enterprises. Originally, it was planned that every six years an evaluation of the land and any buildings built on it would be carried out. The same applies to agricultural and forestry enterprises. In this way, one wanted to ensure that one always taxes current value ratios.

But on the one hand this only applied to the former Federal Republic with its federal states, while the territory of the GDR remained untouched in this respect. Therefore, the first main assessment procedure took place only in the old federal states. On the other hand, in the course of the first main assessment procedure, it turned out that the cost of such a mammoth task for the valuation of all taxable properties was enormous. Instead of initiating a second main assessment procedure as originally envisaged and even legally fixed, a different approach to uniform assessment had been chosen for the period from 1971 onwards.

Based on the values provided by the first main determination procedure in 1964, the values were adjusted simply by using a factor. This was the way to simulate the gradual price increase in the real estate market. Because this should also increase the property tax in parallel.

1.2. Measures to adjust property tax after reunification

However, the reunification of Germany created a situation for which a solution was needed. However, instead of reforming the land tax law, which had become quite obviously obsolete, the new federal states simply chose older value estimates established during the Third Reich and applied other factors to them.

1.3.Appeal before the Constitutional Court

But this went well only until it came to a complaint before the Federal Constitutional Court. Because these taxation rules on property tax included the stain of unequal treatment. Since the judges of the Constitutional Court regarded this argumentation as well-founded in their 2018 judgment, they obliged the then Federal Government to reform the property tax law.

1.4. Reform of the Property Tax Act

Therefore, a new property tax law had to be introduced by the end of 2019. But some federal states were only moderately convinced of the intended concept. In particular, the Free State of Bavaria announced its resistance in the Bundesrat. However, it was willing to compromise if the property tax law would provide an opening clause for different regulations by the federal states. In order to meet the deadline for the adoption of the property tax reform, the Federal Government agreed to the introduction of the opening clause.

The Saarland has followed the example of six other federal states and has now formulated its own guidelines for the collection of property tax in its territory.

The legal basis for the regulations deviating from federal law in Saarland requires only two paragraphs. They are contained in the Saarland Property Tax Act (GrStG-Saar).

It is therefore hardly surprising that the Saarland Property Tax Act largely refers to other legal bases. On the one hand, this means the Valuation Act, from which it takes over the legal basis for the valuation of the land. On the other hand, several provisions of the Federal German Property Tax Act also apply.

For example, the new property tax is only payable from 2025. However, taxpayers who are debtors of a property tax within the meaning of the Federal German Property Tax Act must already make a declaration to determine the property tax values from 2022. The call will be made by public announcement. 01.01.2022 is considered the main date of determination. The information in the tax return must therefore refer to this date.

3. collection of property tax in Saarland

At this point, of course, you can expect comprehensive information on the changes that the Saarland envisages in the collection of property tax for its cities and municipalities. But instead of a paragraph packed with explanations, you only see a few lean multiliners here. How can that be?

Well, this is made possible by the small extent of the deviations which the Saarland claims for itself with regard to the general federal law. Thus, it agrees to the application of federal law in almost all areas. Only the tax figures, which are to be used in Saarland from 2025 to determine the property tax, deviates. Therefore, only two paragraphs in the Saarland Property Tax Act are sufficient.

For example, a tax reading of 0.64 ‰ should apply to undeveloped land in Saarland. In federal law, only 0.34 ‰ is used as a tax measure. Furthermore, the measured tax number for real estate where the income value method is used should be 0.34‰. This therefore applies in particular to residential buildings and condominiums. The tax figure in Saarland is thus 0.3 ‰ higher than in the Federal German regulation on property tax. In addition, the measured tax figure for real estate, the values of which are determined in the property value procedure, should also be above those in the Federal Property Tax Act. For this purpose, a tax figure of 0.64 ‰ is also provided in the Saarland, which is 0.3 ‰ above that in the federal law.

At the end of this admittedly manageable article on the new property tax in Saarland – those on property tax in Bavaria or Baden-Württemberg are much longer – we briefly draw our conclusions. Because the increase in the tax figures in Saarland leads to a general increase in the property tax itself. But due to the simultaneous changes in the valuation of land in the Valuation Act, this is intended to ensure that the municipalities can continue to levy property tax, which is at today's level. But whether this will actually be the case in individual cases can only be revealed to us by looking at the experience with regard to the first property tax collection in 2025. Finally, after the tax offices have established the property tax values, the municipalities also have time to adjust their rates to the new circumstances. So let's see what's coming up.

If you are also affected by these measures, which stem from the much-needed property tax reform, then you might very well be interested in an all-encompassing service regarding property tax in Saarland. We are happy to provide you with our expertise. All you need to do now is follow us on this link to commission us with the comprehensive care. After all, this is the only aspect on which we cannot take any initiative.