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

08. February 2022 | Property tax in Saxony from 2025 (this contribution)

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 property tax reform in Germany enables the federal states to enact their own alternatives to the property tax law through an opening clause. Among the federal states that develop their own requirements for collecting property tax is also the Free State of Saxony. In this case, only an adaptation of the control measurement numbers is required. In all other points, however, the property tax law should follow the federal model.

The introduction of the property tax in the new federal states was associated with many questions. On the one hand, the collection of property tax in the old federal states was based on a 1964 main determination procedure, for which there was no parallel in the GDR. On the other hand, one wanted to avoid as much as possible the huge effort of a new main finding. Even then, it should have been clear that this step was basically inevitable. After all, it had to be ensured that taxation for all taxpayers also takes place under the same conditions in this respect. But even the collection of property tax in the old federal states was hardly justified as contemporary. She also had doubts about being a fair taxation.

Therefore, it is hardly surprising that finally a lawsuit to review the constitutionality of property tax also reached the Federal Constitutional Court. Here, the judges should decide how to proceed with the questionable practice in the collection of property tax in Germany. And so was the judgment of the judges in 2018 that the continuation of the current proceedings for the collection of property tax was in conflict with the Basic Law. Therefore, she also called for the swiftest possible reform of the property tax law by the end of 2019. Otherwise, there would no longer be any basis for collecting the property tax. What this would have meant for the finances of cities and municipalities is hard to imagine.

Therefore, the then Federal Government hastened the reform of the property tax. However, this was based on a procedure very similar to the original one. However, several federal states also saw in the reform of the property tax law an opportunity to discuss alternative procedures. In particular, the simplification of the method was in the foreground. However, since the amendments proposed by the Federal Government only had the prospect of receiving the Federal Council’s blessing if the federal states were also taken into account with their ideas, the introduction of an opening clause was chosen as a compromise. By using the opening clause, each federal state was open to introduce its own system for collecting property tax.

And so Saxony also decided to collect property taxes according to its own rules. Our article should now provide you with the most important information about this.

The changes that the Free State of Saxony envisages with regard to the collection of property tax in its territory are contained in the Saxon Property Tax Measurement Act (SächsGrStMG). In the version of 21.12.2021 it is valid since 06.01.2022. This includes the essential regulations with which the deviations from the federal German property tax law are established in the Free State of Saxony. For this purpose, the Saxon Property Tax Measurement Act refers to both the general Property Tax Act and the Valuation Act. The reference to the Valuation Act is relevant in that it contains the provisions on certain types of tax objects. In other words, there is a reference to what one considers to be undeveloped (§ 246 BewG) and built-up land (§ 249 BewG). However, in order to implement a different regulation from the Property Tax Act, the reference to § 15 (1) no. 1 and 2 GrStG, from which one would like to deviate in Saxony, also had to be included in the Saxon Property Tax Measurement Act.

In fact, in the future property tax in Saxony, compared to the German model, only the tax metrics that are used in the calculation of the property tax values change.

For unbuilt land within the meaning of § 246 BewG, the tax figure in Saxony should be 0.36 ‰. In the federal model, only 0.34 ‰ is provided for this. In the case of plots of land which, according to § 249 (1) no. 1 to 4 BewG, are built with buildings which are mainly used for residential purposes, the tax figure in Saxony should also be 0.36 ‰. This refers in particular to one- and two-family houses, tenant property and condominiums. For this type of property, the Federal German property tax law instead provides for a reduced tax figure of 0.31 ‰ in the future. For all other plots of land, which thus refers to § 249 (1) number 5 to 8 BewG, a tax measure of 0,72 ‰ should apply in Saxony. This is 0.38 ‰ more than the federal law on property tax and is therefore more than twice as high. This significantly increased tax figure relates in particular to commercial land, mixed-use land, partial ownership and other built-up land.

With regard to property tax A, which concerns agricultural and forestry enterprises, there are no deviations from the regulations in the federal law.

Also without deviations, the Free State of Saxony also assumes the property tax C, with which municipalities may optionally levy an increased property tax on building-ready but undeveloped land.

Compared to the federal model, the consistently increased tax figures in Saxony suggest that the property tax in the Free State will be higher than in other federal states. However, one must bear in mind that the lifting rates of the cities and municipalities have not yet been taken into account. Because they also ultimately decide on the actual amount of property tax in Saxony.

In addition, despite the sometimes clear deviations in the tax figures, the revenue neutrality desired by the state policy can still be realized. However, this does not automatically mean that all taxpayers will continue to pay property tax in the same amount. After all, the objective of the property tax reform to abolish existing unequal treatment would be missed. As a result, some taxpayers who previously had to pay too much property tax will have to pay lower property tax in the future. Conversely, those who have been able to benefit from a too low property tax must expect higher property tax amounts in the future. However, the deviations from the previous property tax amounts in both cases should generally be rather small due to the proposed changes. But only the real estate taxes actually collected in 2025 and afterwards can show us how the individual influences will affect this. So it remains exciting.

Be that as it may, from 2022 all taxpayers in Saxony who have to pay a property tax will also be called up to submit a property tax return. Because the basics for the collection of property tax in 2025 should refer in Saxony as well as in the other federal states to the conditions that prevailed on 01.01.2022. If you want professionally competent support from an experienced tax consultant in this regard, then you are at the right place with us. All you need to do now is simply follow this link to our information page, which informs you about our special service.