The property tax reform is keeping many law firms and companies on their toes. This is also the case for Guido Karmann, the property tax specialist at the Dortmund-based commercial law firm Husemann, Eickhoff, Salmen & Partner. For the past eight weeks, the tax adviser has been working with Opti.Tax Land Tax. In an interview with hsp Managing Director Paul Liese, he takes stock of the situation so far. How is the issue of property tax reform generally progressing, both within the firm and amongst clients? What experiences has Guido had with clients, and with the software? What are the sticking points? Have there been any surprises regarding property tax? What general advice does he offer to other professionals tackling property tax?
Guido Karmann works as a tax adviser at the Dortmund-based firm Husemann, Eickhoff, Salmen & Partner. In addition to tax consultancy, the firm has been providing services in various other areas of consultancy for the past twelve years. He only began looking into the subject of property tax when he was searching for suitable software. After reviewing a number of providers, he ultimately opted for hsp’s property tax software, Opti.Tax Grundsteuer. Much of it comes down to ‘learning by doing’, says Guido.
Should those interested find out all the details before deciding on a software solution? Or is it better to find a (software) partner first and tackle the issue together? Guido sees advantages in both approaches. Of course, experts can find out about the details in advance, such as the different country-specific models. On the other hand, the whole reform is new to everyone involved. Consequently, obstacles crop up time and again during implementation, which can naturally be overcome more quickly when working together with a partner.
Ongoing lessons learnt regarding property tax
A good example: problems arose when filling in certain fields. The validation rules did not allow the required entries. The rules originated from the ELSTER development team and had been adopted in their entirety by the hsp team. Such errors are regularly corrected through updates. Essentially, the property tax reform is a joint process of ‘learning by doing’, and not just on the part of tax advisers.
In this context, Guido is very pleased with the partnership with hsp. It should be emphasised that ‘partnership’ simply means purchasing and using an hsp product. Guido mentions hsp’s customer-focused approach, which is automatically included with the purchase of the software licence. He feels as though he and Paul are old friends, such has been the intensity of their exchanges over the past few weeks. And that is exactly how it should be. Together, many ideas and suggestions have led to improvements for both sides.
Key lessons learnt from the property tax reform
As a tax adviser, what has been the biggest lesson for Guido Karmann from his first eight weeks dealing with property tax? Firstly: Entering the data isn’t the biggest problem, even if hurdles do crop up time and again. Particularly with large commercial properties, not all the data is always available. However, on the whole, data entry is quite manageable. He has a tip for property owners here: get a valuation report. If an expert has already inspected everything at some point – determining and recording dimensions, years of construction and the like – then that data can be used.
Guido finds mixed-use properties particularly challenging. A simple example: an owner lets out retail space on the ground floor, with flats above. Often, these people have never even heard of gross floor area. This means a specialist has to be called in to calculate it. Of course, this isn’t free. And additional costs rarely encourage people to take action. Yet anyone who owns property needs to act now. Guido says he isn’t the sort of person to sit and wait. Anyone who waits until two months from now to tackle the issue of property tax could find themselves under pressure. The closer October gets, the more property tax cases will pile up. That’s why the expert advises every tax consultancy and every client to start addressing the issue now.
Property tax reform requires planning
Another question that needs to be clarified is: Who in the firm will take on the tasks arising from the property tax reform? There are various approaches to managing the sudden surge in workload. Guido Karmann works predominantly on a project basis, so he was the natural choice within his firm to take charge of property tax matters. In addition, two other colleagues are also involved. When several people are entrusted with property tax matters, team members can exchange ideas and build up expertise together. Other law firms form partnerships to resolve the issue of capacity.
As Guido speaks, one thing becomes clear: practical experience is key. No matter how much background reading one does beforehand, nothing sticks in the memory quite like the lessons learnt from real-life cases. To capitalise on this learning effect, Guido and his colleagues have run through a number of test cases. As a result, the content of the seminars stuck in their minds much better. All in all, he is confident that he will be able to handle the subject well. However, he also admits quite openly that the property tax reform is a necessary evil that creates a great deal of work for law firms and their clients.
Conclusion: Every professional should get started on property tax as soon as possible. After all, you can’t make up for lost time. And the deadline is definitely coming.
German 
English