What NRW owners need to know now

Property tax reform by 2025
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What NRW Landlords Now Need to Know About Property Tax

Nearly four million private homes owned real estate in the state of NRW in 2018: many had a dream of their own four walls coming true. The property tax reform will now apply to you and anyone else who has purchased property since July. Some have to pay more, others less. What owners should locate it, what happens if they lose the notice and how they can get help filling it out.

Since the beginning of January, they’ve arrived in the owners’ mailboxes: information sheets for the property tax return due in the current year. First, along with the 2022 tax peg, there was preliminary information. Now follows the second letter which reveals much more. A hot line has also been established. Answers to the most important questions.

How many people are infected in North Rhine-Westphalia?

In 2018, nearly four million households owned real estate, according to data from the Income and Consumer Survey, which government statistics offices collect every five years. Among them, more than 60 percent of the owners own a single-family home (2,400,000 families), and more than 30 percent own a condominium. 5.2 percent of households have undeveloped land – that’s 200,000 areas in the NRW.

What changes for owners?

Property tax is still calculated today based on the old standard assessments. They refer to 1964. The Federal Constitutional Court ruled in 2018 that this is no longer possible. The costs of similar large and old properties in a similar location have varied more and more over the decades due to outdated data. In some places, people pay much more than others despite the same number of square meters and the same apartment style – eg for a single family home. Therefore, all units must now be re-evaluated. There may also be a new third property tax: the property tax c. Cities and municipalities can provide this themselves for plots of land that are ready for construction but not developed. This is to prevent land speculation.

How is the new property tax calculated?

In the first step, the tax office now asks for all the important information about the property and the property. These are the property’s location, property size, standard land value, type of use, living space, and the year the building was built. In addition, the owners received a file number on the new notice from the tax office, which they must save for the declaration they have to file online from July. From the data collected, the Tax Office then determines the value of the property tax as of January 1, 2022—that is, the value the property had at that time.

In the second step, the information then results in the real estate tax basis amount, which the IRS notifies the property owner of another decision, along with the value of the estate tax. Objections can be made against this if the landlords do not agree – but only against this notice from the tax office, and no longer against the property tax notice from the city.

How can owners submit their property permit?

Who is the owner has received more information in a new letter from the tax office. Among other things, that the properties to be taken for private property must be made using a digital form on the tax portal of the tax authorities (Ulster). The same is the case with the tax return. There will be free access to the Elster website for this purpose from July 1st. Anyone who does not have a user account there yet but is required to submit an account creation statement first. Authorities warn that registration can take up to two weeks, so owners should take care of it ahead of time. They also write: “If you already have a user account, which you use for tax returns, for example, you can also use this for property tax.” Information can be entered on the portal until October 31, 2022.

Can you also submit your statement in the same way?

Only “in exceptional cases, for example, if you do not have Internet access, you can order paper forms from the tax office,” the tax offices say in the letter to the owners.

What about tax advisors?

Anyone with a tax advisor on property tax reform information is advised to forward the letter on all pages – including information on personal property. Here too, the deadline is October 31, 2022.

What happens if the message is lost?

If you can’t find the letter from the tax office, you’re in luck. Because the data on your property can also be accessed via the website grundsteuer-geodaten.nrw.de. There you will find a map of the federal state where you can zoom in to where you live. If you have come to the correct address, you can click on it to find information about your plot, land registry or the area of ​​\u200b\u200byour property in square metres. Use type or standard land value can also be read. Owners must write down the file number to be given for the acknowledgment, as this is not available electronically. If you want to be sure, take a picture of it.

Is there any help other than the hotline?

The Homeowners Association wants to inform owners at a webinar about property tax declaration. It will take place in about two weeks – on June 28 at 6pm. Subscription is free. If you wish to participate, you can register via https://bit.ly/3HtQf7.

When will the new property tax come into effect?

New property tax will be applied from January 1, 2025. It can be paid either quarterly – in February, May, August and November, or once a year. That will be in July.

Buildings and land have become significantly more expensive in recent years. Is the property tax going up now?

No, at least not necessarily. Finally, the law states that the reform must be “income-neutral.” This means that the city’s property tax income should not increase due to property revaluation and changing property tax amounts. But: within this “tax mountain” there will be transformations. This means that some property owners will likely have to pay less tax using the new method from 2025, while others will have to pay more. According to the court’s ruling, previous grievances should be addressed in this way.

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