Property tax 2026: what you need to know
What is property tax?
Property tax is a tax levied on owners of land and property on the basis of the standard value or the area of the land, and provides revenue for local authorities.
What is the property tax reform?
The property tax reform is a reform of the German property tax system that was adopted in 2019 and came into force on 1 January 2025. It aims to make the calculation of property tax fairer and in line with the constitution by basing it on the current value of land and buildings rather than on outdated standard values.
What does property tax software do?
One Property tax software such as Opti.Tax It supports the calculation and administration of property tax by recording data on plots of land, properties and tax rates, carrying out automated calculations and generating reports for the tax authorities.
We have been developing compliance and reporting solutions for professionals for decades.
The software uses the BZSt taxonomy, so you won’t miss a thing.
We keep the software up to date with free updates.
Until the 2019 property tax reform, property taxes in Germany were calculated on the basis of completely outdated data. To rectify this, the Bundestag approved the property tax reform on 18 October 2019, followed by the Bundesrat on 8 November 2019. As part of the reform, more than 30 million properties were reassessed in the years that followed A reassessment of the whole of Germany.
Consequently, all property taxes had to be recalculated. A workload that has pushed not only tax advisers, property management firms, landowners and estate agents to their limits. We now know that the authorities, too, were anything but prepared. On this page, you can find out everything you need to know about the reform and its consequences.
In addition, we would like to introduce you to our property tax software, which allows you to prepare and submit your property tax return(s) conveniently, comprehensively and seamlessly.
Yours, Paul Liese
What does the new property tax mean for tax advisers, property management firms, businesses and others?
The calculation of property tax based on completely out-of-date data has been declared unconstitutional – and the property tax reform has been adopted. The property tax must therefore be recalculated. There is no way to avoid this. Every individual property tax payment will change. This means:
- Clients will contact their law firms to have their property tax recalculated
- Tax advisers are faced with questions from their clients
- Whether you’re a law firm or a business, you need to start the recalculation process in good time
- You can’t do it without specialised property tax software
Our videos on property tax: facts, background information and advice
Property Tax Reform
What will the rules be for property tax in 2026?
Property tax before the reform
Until the property tax reform, outdated data was used to calculate property tax. The property values in West Germany used for this purpose date from 1964, whilst those in East Germany date as far back as 1935. Over the decades, property values have developed in completely different ways. As a result, similar properties are treated differently today. This was declared unconstitutional in 2018.
Property tax from 1 January 2025
In future, property tax will continue to be calculated using the formula: value × tax assessment rate × assessment rate. However, these three factors will be updated and adjusted to further optimise the system.
- Value: The property value is recalculated. There are key factors involved in this: the respective value of the land (standard land value) and the amount of the statistically determined net rent excluding service charges. The latter depends, for example, on the municipality’s rent level category. Other factors include the plot area, the type of property and the age of the building.
- Tax reference figure: The enormous increases in value since 1935 and 1964, respectively, must be offset. To this end, the tax assessment rate is being reduced to less than a tenth of its previous value: from 0.35 % to 0.034 %. In cases of social housing, as well as municipal and co-operative housing, there is an additional reduction of 25 %.
- Rate of levy: If a local authority’s property tax revenue changes as a result of the reform, it can use the assessment rate to offset this change. The aim is for local authorities to collect the same total amount of property tax after the revaluations as they did before.
When does the new property tax come into effect?
The new property tax has been in force since 1 January 2025. All recalculations had to be completed by then. Whilst the law stipulates that the total amount of property tax must not exceed the level prior to the reform, this applies only to total revenue. In practice, however, each property tax assessment must be recalculated and each property tax return must be redrafted and resubmitted.
Which property tax software is the right one?
What does the software need to be able to do?
Good software for calculating property tax must meet three key criteria.
- Current affairs
Property tax is influenced by many factors. The legal framework is also subject to frequent changes. It is therefore important to choose software that is constantly updated and kept up to date by the provider. - DATEV integration and other interfaces
DATEV itself will not be offering a software solution for property tax. To ensure that you can work as efficiently as possible, save time and avoid data disconnects, we therefore recommend using an application with a DATEV connection. Depending on the software system used, additional interfaces should be available, e.g. to ADDISON, BMD and others. - Integrated solution
Integrated solutions are programmes that form part of a family of programmes. Well-known examples include MS Office and the Adobe suite. In contrast, there are stand-alone solutions, i.e. individual products designed for specific tasks. Such stand-alone solutions carry several risks:- Lack of interfaces: Stand-alone solutions often offer only a limited number of interfaces.
- Limited functionality: Stand-alone solutions are limited to the area that currently offers the highest profit margins.
- Short lifespan: For providers of stand-alone solutions, it is usually not worth keeping the software up to date free of charge for years on end.
An integrated solution offers far more in this respect, as it operates seamlessly and reliably within an ecosystem. Opti.Tax is precisely such a solution.
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Standard
- Licence fee per law firm/company
- €5.00 per case*
- Unlimited number of users
- Including practical guides, checklists, e-learning courses, sample cover letters, templates for contracts and powers of attorney, etc.
* Refers to the number of properties transferred via the Elster Rich Client (ERiC), for example, land, houses, flats, woodland, arable land, etc.
12-month contract term; all prices are subject to 19 % VAT.
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About hsp – Software innovation made in Germany
Since 1991, hsp Handels-Software-Partner GmbH has been developing professional software solutions for tax consultancy and audit firms, as well as for businesses.
Our taxonomy software Opti.Tax has established itself amongst discerning professionals in the DACH region as the reliable, high-performance and long-term solution for electronic invoicing. The digital tools for legally required, GoBD-compliant documentation are particularly popular.
Practical relevance, up-to-date content and genuine service
Our software modules are developed in close collaboration with experienced partner firms such as Energiesozietät GmbH for internal control systems (IKS), ADKL Abels Decker Kuhfuß & Partner mbB for transfer pricing, and Schröder & Partner for the digital pension file. In this way, we ensure that the features in Opti.Tax are tailored to the real-world challenges of day-to-day professional practice.
Regular updates ensure that changes to legislation and new requirements are incorporated into the software in a timely manner. In addition, we support you with a comprehensive range of service and support offerings, e-learning courses, access to the hsp Community, our weekly live broadcast „hsp live at 11“ and much more.
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