Property taxes

Property Taxes - Property taxes refer to the totality of local taxes that owners of land and buildings are required to pay to the municipality on a regular basis. They combine property tax, sewerage fees, street cleaning fees, garbage collection fees, and, where applicable, stormwater fees into a single tax assessment notice.

Components and Legal Basis

Property taxes consist of several individual items, each based on different legal grounds:

• Property Tax B: The most important component is levied on developed and developable land. It is calculated based on the property tax assessment value (set by the tax office) multiplied by the assessment rate of the respective municipality. With the 2025 property tax reform, the assessment bases in Bavaria were recalculated according to the area model.
• Sewage fees (wastewater): These are based on fresh water consumption and are collected by the municipal wastewater treatment authorities.
• Stormwater fee: This is calculated based on the sealed area of the property. Owners who allow rainwater to infiltrate or collect it can apply for a reduction.
• Garbage collection fees: The amount depends on the size of the container and the collection frequency. In Nuremberg, garbage fees are set by the City of Nuremberg Waste Management Authority (ASN).
• Street cleaning fees: These are calculated based on the frontage length of the property facing the street to be cleaned and the cleaning class.

The notice regarding property taxes is generally issued once a year by the municipality and is due in quarterly installments on February 15, May 15, August 15, and November 15. Many municipalities offer an alternative annual payment due on July 1. The taxes are always charged to the owner listed in the land registry-not the tenant. However, significant portions of the property taxes may be passed on to tenants as operating costs, provided the lease agreement contains a corresponding clause and the Operating Costs Ordinance (BetrKV) permits this.

Passability to Tenants

For landlords, the question of passability is particularly important. According to Section 2 of the Operating Costs Ordinance, the following components of property taxes are passable on to tenants: property tax (Section 2 No. 1 BetrKV), water supply and drainage (Section 2 Nos. 2 and 3), waste disposal (Section 2 No. 8), and street cleaning (Section 2 No. 9). A prerequisite is that the lease agreement either refers to the BetrKV or specifically lists the individual cost categories. We recommend that landlords carefully itemize property taxes in the annual operating cost statement, as tenants are entitled to transparent individual line items. General references to the overall assessment notice are regularly rejected by courts as insufficient.

Practical Tip for Nuremberg and the Metropolitan Region

The amount of property taxes varies considerably within the Nuremberg metropolitan region. The city of Nuremberg currently applies a property tax B assessment rate of 555 percent, while neighboring municipalities such as Schwabach (450 percent) or Wendelstein (330 percent) apply significantly lower rates. Sewage and garbage fees also differ noticeably. For prospective buyers weighing options among several locations in the region, we recommend including annual property taxes as a fixed item in the profitability calculation. For a rented condominium in Nuremberg, the non-pass-through portions of property taxes can measurably reduce the net return. We are happy to assist our clients with location analysis so that all ongoing costs are transparently calculated from the outset.

Frequently Asked Questions

Can I file an appeal against the property tax assessment notice?

Yes, an appeal against the notice can be filed with the issuing municipality within one month of delivery. In Bavaria, however, it is important to note that the assessment rate and the property tax base must be challenged separately-the tax base is determined by the tax office and must be contested with a separate appeal. We recommend carefully reviewing the new notices, especially following the 2025 property tax reform, as revaluations have led to significant changes.

Which property taxes can I, as a landlord, not pass on to tenants?

Administrative costs, maintenance reserves, and property management fees are not passable. Late payment penalties or reminder fees resulting from the owner’s late payment may also not be passed on to tenants. Property tax itself, sewage, garbage collection, and street cleaning, on the other hand, are passable as operating costs, provided this is effectively agreed upon in the lease agreement.

Do property taxes automatically change when ownership changes?

The tax liability transfers to the new owner upon the transfer of ownership in the land registry. The municipality is notified of the change in ownership by the land registry office and issues the tax assessment to the new owner starting the following year. The purchase agreement typically specifies which party is responsible for the taxes for the current calendar year-in practice, this is often determined on a day-by-day basis corresponding to the economic transfer (change in benefits and burdens).

Objections and Review of Assessment Notices

Property taxes should be reviewed annually, especially if changes have occurred to the property or its use. Since the 2025 property tax reform (Federal Model/Bavarian Model), many assessment notices have been recalculated. In Bavaria, the area-based model applies, which differs from the federal regulation and is calculated based on property area, building area, and type of use. Some owners have been burdened with higher taxes than expected due to the reform-in such cases, it is worth taking a close look at the tax assessment notice from the tax office and the municipality’s calculation.

The following should be checked during the review: Does the land area stated in the notice match the land register and the cadastral records? Is the type of use recorded correctly? Were demolished or newly constructed building sections reported in a timely manner? Errors in the tax office’s or municipality’s database regularly lead to incorrect notices.

Property Taxes as a Cost Factor in Return Calculations

For investors purchasing rental properties in the Nuremberg metropolitan region, property taxes are a fixed component of operating cost calculations. For a rented apartment building in Nuremberg with six residential units, annual property taxes can range from 3,000 to 8,000 euros, depending on the lot size, building area, and collection frequency. The portion that can be passed on to tenants (property tax, sewage, garbage, street cleaning) is recouped through the operating cost statement; the remaining portion that cannot be passed on (administrative fees, late payment penalties) reduces the net return.

Anyone comparing properties in different municipalities within the metropolitan region should factor in the property tax assessment rate as a distinguishing criterion: The range between Nuremberg’s assessment rate of 555 percent and that of a surrounding municipality such as Wendelstein (330 percent) or Schwanstetten (360 percent) can amount to an annual difference of several hundred euros for a larger rental property. With a purchase price of 800,000 euros and a target net return of 3.5 percent, an annual tax difference of 500 euros corresponds to a return difference of 0.06 percentage points-a figure that should not be ignored in the location analysis.

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