The filing deadline for the property tax assessment return (Grundsteuer-Feststellungserklärung) was initially set for the end of January 2023. Nevertheless, some private individuals and businesses have not yet submitted this return to the tax authorities. The following outlines the consequences to be expected in the event of late filing.
As a general rule, most German federal states issue a reminder letter to the respective taxpayer who has missed the filing deadline.
Federal states issuing reminder letters
According to the tax authority of Baden-Württemberg, reminder letters for property tax B (Grundsteuer B: developed and undeveloped land) will first be issued in the first quarter of 2023, followed by property tax A (Grundsteuer A: agricultural and forestry operations) in the second quarter of 2023.
Bremen, Lower Saxony, and Rhineland-Palatinate intend to follow this or a similar approach. It has also been announced that the respective tax authorities will only impose late-filing penalties and coercive fines after the end of the first quarter of 2023.
In Berlin, Brandenburg, Hesse, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein, and Thuringia, the tax authorities will likewise issue reminder letters regarding the filing deadline for the property tax assessment return. However, it remains unclear when late-filing penalties or other measures will be taken in these federal states.
Federal states with a different approach
In Bavaria, it has been announced that the tax authority will decide on a case-by-case basis whether an extension of the deadline is granted in justified individual cases. Penalties for late filing are possible. When imposing penalties, however, the tax authorities intend to take into account the short filing period as well as the novelty of the property tax calculation procedure.
Finally, in Hamburg no decision has yet been made regarding the further course of action after 31 January 2023. As a result, late-filing penalties and similar measures cannot be ruled out in the event of late submission of the property tax assessment return.
Coercive fines and late-filing penalties
Where a late-filing penalty is imposed pursuant to § 152 AO, it amounts to at least EUR 25 for each commenced month of late filing (§ 152 Abs. 5 S. 2 AO). It should be noted, however, that in those federal states applying the federal model (Thuringia, Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt, and Schleswig-Holstein), the imposition of a late-filing penalty pursuant to § 152 Abs. 2 AO is excluded (Art. 97 § 8 Abs. 5 EGAO). Consequently, late-filing penalties will not be imposed automatically where the property tax assessment return is not submitted on time, but only in justified individual cases.
The imposition of a coercive fine, by contrast, takes place in two stages. First, the levying of the coercive fine is threatened, and only after the set deadline has expired without result is the coercive fine actually imposed. This means that if the property tax assessment return is submitted after the coercive fine has been threatened but before the deadline for its imposition expires, the coercive fine is waived entirely. The coercive fine amounts to at least EUR 200.
Estimation by the tax office
If the property tax assessment return is not submitted to the competent tax authority over a longer period, the authority will issue an estimated assessment of the tax base. Experience shows that such estimates tend to be unfavourable for the taxpayer. Furthermore, despite the estimation by the tax office, the obligation to submit a property tax assessment return remains in place.
Applying for an extension of the deadline
In principle, an extension of the deadline may be applied for at any time with the tax authority. It should be noted, however, that an extension will only be granted where a coherent justification is provided. Examples have included prolonged illness or, in individual cases, the time-consuming procurement of documents and information required for the submission of the property tax assessment return.
Frequently asked questions
Frequently asked questions
What are the consequences of submitting the property tax assessment return late?
Late submission may trigger late-filing surcharges under § 152 AO (at least EUR 25 per month commenced) as well as coercive fines (at least EUR 200). In addition, the tax office may impose an unfavorable estimated assessment, while the filing obligation remains in place despite the estimate. In most federal states, taxpayers in default first receive a reminder letter.
In which German federal states are late-filing penalties for the property tax return largely excluded?
In the federal states applying the federal model – Thuringia, Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt and Schleswig-Holstein – the automatic assessment of a late-filing penalty under § 152 Abs. 2 AO is excluded pursuant to Art. 97 § 8 Abs. 5 EGAO. In these states, late-filing penalties are imposed only in justified individual cases.
How is a coercive fine imposed in connection with the property tax assessment return?
A coercive fine is imposed in two stages: first, the tax authority threatens the fine and sets a deadline. Only after this deadline has expired without compliance is the fine actually imposed. If the return is filed after the threat but before the fine is imposed, the fine is waived entirely. The minimum amount is EUR 200.
What are the consequences of an estimate by the tax office regarding real estate tax?
If the taxpayer fails to submit the real estate tax assessment declaration for an extended period, the tax office will estimate the taxable item. Experience shows that such estimates tend to be unfavorable for the taxpayer. The obligation to file the assessment declaration remains in place despite the estimate.
Under what conditions can a deadline extension for the property tax return be granted?
A deadline extension can be requested from the competent tax authority at any time, but is only granted with a plausible justification. Recognized reasons include, for example, prolonged illness or, in individual cases, the time-consuming procurement of necessary documents and information. In Bavaria, the tax authorities also decide on extensions in justified individual cases.