Until now, the basis of calculation for the donation of a property within the family circle was three times the assessed value (Einheitssatz). However, since the assessed value was last determined in the 1970s, it is now far below the true (market) value of the property in the vast majority of cases. Since 1st January 2016, a new assessment basis for land transfer tax has been in effect, the so-called property value.
Pursuant to § 4 para 1 Land Transfer Tax Act (GrEStG), the land value is to be calculated
- either as the sum of the extrapolated pro rata triple land value pursuant to § 53 para 2 Valuation Act 1955 as amended and the pro rata value of the building (so-called flat-rate value model) or
- in the amount of a value derived from a suitable real estate price index.
The detailed valuation regulations are governed by the Real Estate Valuation Ordinance (GrWV) of the Federal Minister of Finance.
In the flat-rate value model, three times the land value from the last assessment notice is to be used and multiplied by the floor area. The product of this multiplication is to be multiplied by the so-called extrapolation factor, an increase yield specified for each municipality in the ordinance, which is to reflect the development of land prices in this municipality.
The building share is to be added to the value of the land share determined in this way. For this purpose, the useful building area is multiplied by the building cost factor specified in the ordinance and an age reduction value.
The tax debtor is at liberty to prove that the fair market value of the land at the time the tax liability arises (= regularly the time of conclusion of the contract) is lower than the land value determined in accordance with the Ordinance. Insofar as this proof is provided by an appraisal report of a generally sworn and judicially certified real estate appraiser, it has the presumption of correctness in itself.
The tax rate of the real estate transfer tax is also more difficult from 01.01.2016 than before. While 3.5% of the purchase price is still to be applied for purchase contracts, a graduated rate is applied for acquisitions free of charge:
The tax rate is
- for the first EUR 250,000.00: 0.5%
- for the next EUR 150,000.00: 2%
- beyond that: 3.5%
of the property value. Donation between the same persons are to be added together within 5 years.