How is the new property tax calculated?

The new German property tax (Grundsteuer) is calculated in three steps: First, the tax office determines the property tax value (Grundsteuerwert) of your property. This is multiplied by the legally defined tax assessment rate (Steuermesszahl) to produce the tax assessment amount (Steuermessbetrag). Finally, the municipality multiplies the assessment amount by its individual tax rate (Hebesatz) — this gives the annual property tax. Depending on the federal state, the method for determining the property tax value differs significantly: some states use the value-based federal model, while others use purely area-based models.

Which calculation model applies in my federal state?

Germany has six different property tax models: The federal model (value-based) applies in 11 states, including Berlin, NRW, Saxony, and Schleswig-Holstein. Bavaria uses a pure area-based model where only the plot and building area count — the property value plays no role. Baden-Württemberg uses the land value model, based solely on the land value per square meter. Hamburg has a residential quality model, Hesse uses an area-factor method, and Lower Saxony has an area-location model. Our calculator automatically detects the correct model based on your federal state.

Where do I find my land value (Bodenrichtwert)?

You can find your land value for free via the BORIS portal (Bodenrichtwertinformationssystem) of your federal state. Simply enter your address or parcel number, and the current land value will be displayed. Alternatively, you can request the land value from the expert committee (Gutachterausschuss) of your municipality. For the property tax calculation, the land value as of January 1, 2022 is typically used, which is stated in the property tax value notice (Grundsteuerwertbescheid) from the tax office.

What is the Hebesatz and how does it affect my property tax?

The Hebesatz (municipal tax rate) is a percentage set individually by each municipality and serves as the final multiplier in the property tax calculation. It varies enormously: from under 200% in small rural communities to over 900% in some major cities. Municipalities were asked to adjust their tax rates during the reform to keep total revenue neutral. In practice, however, many municipalities changed their rates to varying degrees, meaning the individual tax burden for property owners has indeed shifted.

Will my property tax increase or decrease?

This cannot be answered in general terms, as it depends on three factors: the new property tax value of your property, the tax assessment rate, and your municipality’s adjusted tax rate. While the reform was planned to be revenue-neutral — meaning the municipality should collect the same total amount — within each municipality there are winners and losers. Property tax tends to increase for properties in prime locations with high land values, while owners in simpler areas are often relieved. Use our old-vs-new comparison to see your personal change immediately.

Can I object to my property tax assessment?

Yes, you can file an objection (Einspruch) with the responsible tax office within one month of receiving your property tax value notice. Carefully check whether the underlying data is correct: plot area, living area, land value, year of construction, and property type. Common sources of error include incorrect area figures or an overstated land value. The objection does not have a suspensive effect — you must continue paying the property tax in the meantime. However, if the correction is successful, you will receive a refund for any overpaid tax.

Why does Bavaria have its own property tax model?

Bavaria deliberately chose against the federal model because the state considers a purely area-based calculation to be fairer and simpler. In the Bavarian area model, property values and land values play no role — only the square meters of the plot and building count. Bavaria argues that this prevents rising real estate prices from automatically leading to higher property taxes and makes the calculation more transparent and comprehensible for owners. Critics counter that the model ignores value differences between prime and simple locations.

Do tenants have to pay property tax?

In principle, the property owner is the taxpayer — they receive the assessment and must pay the property tax to the municipality. However, the landlord may pass the property tax on to tenants in full as operating costs, provided this is agreed in the rental contract. This is the case in the vast majority of rental agreements. The property tax then appears in the annual operating cost statement. An increase in property tax due to the reform can therefore directly result in higher utility costs for tenants.

What is the difference between property tax A and property tax B?

Property tax A (agricultural) applies to agricultural and forestry businesses and their land. Property tax B (built-up) applies to all developed and developable plots — meaning residential buildings, condominiums, commercial properties, and undeveloped building land. For the vast majority of property owners, property tax B is relevant. The tax rates for A and B are set separately by municipalities and usually differ significantly. Our calculator computes property tax B, as it applies to the majority of all property owners.

When is property tax due and in what installments?

Property tax is due in four installments of one quarter of the annual amount each: on February 15, May 15, August 15, and November 15. Alternatively, owners can apply to the tax office to pay the property tax as a lump sum on July 1 — this application must be submitted by September 30 of the previous year. When ownership changes (e.g., buying a house), the new owner is only liable for property tax from January 1 of the following year. The payment dates apply uniformly throughout Germany.

Tax Rate Comparison: Most and Least Expensive Municipalities | Property Tax Calculator

Understanding the Hebesatz: The Municipal Multiplier

The Hebesatz (municipal tax rate or multiplier) is the single most powerful variable in the property tax calculation. While the property tax value and assessment rate are determined by state law and objective property characteristics, the Hebesatz is a political decision made by each municipality's elected council. It is the mechanism through which local politicians balance municipal revenue needs against the tax burden on property owners.

In the three-step property tax formula, the Hebesatz is the final multiplier. A Hebesatz of 100% means the property tax equals the tax assessment amount. A Hebesatz of 500% multiplies the assessment amount by five. The Hebesatz is expressed as a percentage of the Steuermessbetrag and can theoretically range from 0% to any positive number, though in practice it typically falls between 200% and 1,000%.

With the property tax reform, municipalities across Germany were faced with a critical decision: how to set their new Hebesaetze. The federal government urged municipalities to adjust their rates to achieve revenue neutrality -- meaning the total property tax revenue should remain approximately the same as before the reform. However, municipalities are legally autonomous in setting their Hebesaetze and were under no obligation to follow this guidance.

The Landscape of German Tax Rates

The variation in Hebesaetze across Germany is striking. At the low end, some small rural municipalities in Bavaria, Schleswig-Holstein, and Mecklenburg-Vorpommern maintain rates below 250%. At the high end, several cities in North Rhine-Westphalia and Hesse have rates exceeding 800%, with a few approaching or exceeding 1,000%.

Among Germany's largest cities, the rates span a wide range. Munich historically maintained a relatively moderate Hebesatz, reflecting its strong tax base and healthy municipal finances. Berlin, despite being the capital, had a comparatively moderate rate as well. In contrast, cities in the Ruhr area such as Duisburg, Essen, and Gelsenkirchen have traditionally had very high rates, driven by decades of industrial decline and the resulting fiscal pressures.

The national average Hebesatz for property tax B (the rate applicable to developed and developable land) has historically been around 400-450%, though the reform has prompted significant adjustments in many municipalities.

Why Tax Rates Vary So Much

Several structural factors explain the enormous variation in Hebesaetze across Germany.

Municipal Financial Health

Wealthy municipalities with strong commercial tax (Gewerbesteuer) revenues and affluent populations typically maintain lower Hebesaetze because they can generate sufficient property tax revenue even with moderate rates. Conversely, financially stressed municipalities -- often those that have experienced deindustrialization, population loss, or high social spending -- tend to have high Hebesaetze because they need every available euro of revenue.

Property Value Base

Municipalities with high property values (and thus high property tax values) can set lower Hebesaetze and still collect substantial revenue. A municipality where the average property is worth 500,000 EUR can set a lower rate than one where the average property is worth 150,000 EUR and still collect the same amount per property. This partially explains why wealthy suburbs often have lower rates than struggling urban cores.

Political Priorities

The Hebesatz is ultimately a political decision. Some municipal councils prioritize low property taxes to attract residents and businesses. Others prioritize public services and infrastructure investment, accepting higher tax rates as the cost of better schools, parks, and public facilities.

Demographic Trends

Growing municipalities with increasing populations tend to benefit from a broadening tax base, allowing them to maintain or reduce Hebesaetze. Shrinking municipalities face the opposite dynamic: as properties are abandoned or depreciate, the remaining property owners must bear a proportionally larger share of the municipal revenue burden.

Regional Patterns in Tax Rates

North Rhine-Westphalia: The High-Rate Epicenter

NRW is home to many of Germany's highest Hebesaetze. Cities in the Ruhr area, Bergisches Land, and parts of the Rhineland have rates that are among the highest in the nation. This reflects the legacy of industrial restructuring and the ongoing fiscal challenges facing many NRW municipalities. Bergneustadt holds the dubious distinction of having had one of Germany's highest rates at over 900%.

Bavaria: Generally Moderate Rates

Bavarian municipalities tend to have moderate to low Hebesaetze. Munich's rate, while not the lowest, is considerably below the rates seen in struggling NRW cities. Smaller Bavarian municipalities often have rates in the 250-350% range, reflecting the state's generally strong economic conditions.

Eastern Germany: Mixed Picture

Eastern German municipalities show significant variation. Some cities that have experienced economic revival (such as Leipzig, Dresden, and Jena) have maintained moderate rates, while others facing population decline and economic stagnation have been forced to raise rates to maintain basic services.

Northern Germany: Moderate on Average

Schleswig-Holstein, Lower Saxony, and Mecklenburg-Vorpommern generally have moderate Hebesaetze, though individual municipalities can deviate significantly. Hamburg, as a city-state, sets a single rate for its entire territory.

Southern Germany Beyond Bavaria

Baden-Wuerttemberg municipalities generally have moderate rates, though there is significant variation. University cities and economically dynamic areas tend to have lower rates than regions facing structural economic challenges.

Impact of the Reform on Municipal Tax Rates

The property tax reform created a one-time opportunity -- and necessity -- for municipalities to recalibrate their Hebesaetze. Because the new property tax values differ fundamentally from the old unit values, maintaining the old Hebesatz with the new values would have produced wildly different revenue totals. Municipalities therefore had to calculate new revenue-neutral Hebesaetze.

The federal and state governments published recommended revenue-neutral Hebesaetze for each municipality. However, these were recommendations only. Many municipalities chose to deviate from the recommended rates, for various reasons. Some set higher rates to increase revenue, especially municipalities facing financial difficulties. Others set lower rates to provide tax relief or attract residents. Some simply rounded the recommended rate to a convenient number.

The reform also changed the internal distribution of the tax burden within municipalities. Even with a revenue-neutral Hebesatz, some property owners pay more and others pay less because the new property tax values redistribute the relative burden. This means that the Hebesatz debate in many municipalities became politically charged, with winners pushing for revenue neutrality and losers pushing for lower rates.

How to Find Your Municipality's Hebesatz

Your municipality's current Hebesatz can be found in several places. The most reliable source is your Grundsteuerbescheid (property tax assessment notice), which explicitly states the applicable Hebesatz. You can also find it on your municipality's website, typically in the section on local taxes or the annual budget.

Our property tax calculator includes a Hebesatz database for many German municipalities. Enter your postal code or municipality name, and the calculator will automatically apply the correct rate. If your municipality is not in the database, you can enter the Hebesatz manually.

If you want to compare your municipality's rate with neighbors or similar municipalities, the Federal Statistical Office (Statistisches Bundesamt) publishes annual Hebesatz statistics that allow detailed comparisons across all municipalities in Germany.

What to Do If Your Municipality Raises the Hebesatz

If your municipality announces a Hebesatz increase, you have limited direct recourse. Unlike the property tax value, the Hebesatz is not subject to individual objection -- it is a general legislative act by the municipal council. However, citizens can participate in the political process by attending council meetings, writing to council members, or organizing with neighbors and property owners' associations.

In extreme cases, Hebesatz increases can be challenged in court if they are confiscatory (konfiskatorisch) -- meaning they effectively consume the income that the property generates. However, German courts have set a very high bar for this standard, and successful challenges are rare.

The most practical approach is to understand the Hebesatz as one factor in the overall cost of property ownership in a particular municipality. When considering where to buy property, comparing Hebesaetze alongside property prices, quality of life, and public services can help you make an informed decision about the true total cost of ownership.

Property tax rates are a reflection of municipal fiscal realities, political priorities, and structural economic conditions. Understanding why your municipality's rate is what it is can provide valuable context for your property tax bill and help you anticipate potential changes in the future.