Extension, new construction, demolition: Report changes to the property to the tax office

If something has happened on a property, owners must report it to their tax office. For example, a major renovation, an extension, or demolition. The reason for this reporting requirement is the property tax reform.

This article is part of the special topic on property tax: What's changing and what property owners can expect.

All property owners and landlords in Germany recently had to submit a declaration for the recalculation of their property tax. In this declaration, they had to provide information about their real estate holdings as of January 1, 2022. This information forms the basis for the property tax assessment by cities and municipalities starting in 2025.

However, if something fundamental has changed or is still changing on a property after January 1, 2022, that could affect the previous valuations, the owners must notify the tax office of this without being asked to do so. There is a reporting requirement, according to the Rhineland-Palatinate State Tax Office.

Changes that must be reported include:

• A first-time development,
• an extension,
• a renovation,
• a complete renovation,
• a demolition,
• the extension of the living or usable space,
• the conversion of business premises into residential premises or 
• the change in the type of use (arable land becomes building land or similar). 

For properties in Bavaria, Hamburg, and Lower Saxony, the deadline for reporting changes is March 31st of the year following the change . In all other German states, the property tax return (assessment declaration) had to be submitted by January 31st of the following year . Therefore, changes that occurred in 2024 and those that will occur in the future must be reported by January 31st, 2025.

New as of January 17, 2025! In Rhineland-Palatinate, the deadline for reporting changes in 2024 has been extended to March 31, 2025. The March 31 deadline of the following year also applies to changes in 2025.

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Changes in ownership, such as a sale of the property, are not subject to the notification requirement. 

"In cases of doubt, it is better to file one too many returns than one too few, because the same penalties apply as for other failed or incomplete tax returns. The reporting obligation must also generally be fulfilled electronically via the ELSTER portal; in hardship cases, paper returns are possible as an exception," reports the property owners' association "Haus & Grund."

The Rhineland-Palatinate State Tax Office provides an example: "If an extension was built onto a single-family home in May 2023, this must be reported to the tax office. The tax office will then reassess the property as of January 01.01, 2024. Depending on the structural changes, this may result in a different property tax value and even a different property classification (for example, a two-family home). The change in value must exceed €15.000 for the property tax value to be adjusted."

Exception: Tax-exempt properties

For properties that are fully or partially exempt from property tax, any change in use or ownership must be reported to the responsible tax office within three months. "The same applies if the conditions for a reduction in the property tax assessment rate no longer apply due to housing subsidies and/or listed building protection," according to the Rhineland-Palatinate State Tax Office. 

Sources: State Tax Office Rhineland-Palatinate; Haus & Grund

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