Auxiliary value

Alternative Value - An alternative value is a value determined by a substitute method in real estate appraisal; it is used when the standard appraisal methods (comparable sales, income, or cost approaches) are not applicable or do not provide a sufficient data basis. It serves as an approximation of the market value and is used in particular for unusual property types, when comparable data is lacking, or in special situations.

Use Cases

Auxiliary values are typically used for: special-purpose properties without comparable properties (e.g., churches, monuments, infrastructure structures), properties undergoing restructuring (demolition planned, change of use pending), foreclosure sales with limited access for inspection and incomplete documentation, as well as for tax valuation under the Valuation Act (BewG) when standardized methods lead to obviously inaccurate results. However, the tax office accepts auxiliary values only if the impossibility of standard valuation is substantiated in a comprehensible manner.

Methodology and Limitations

To determine a provisional value, simplified estimation methods, analogies drawn from similar properties, or residual value methods are frequently used. The provisional value generally has less informative value than a market value determined using recognized methods and is identified as such in appraisals. In court and for bank financing, a provisional value is accepted only with reservations-lending institutions generally require a full-fledged appraisal in accordance with the ImmoWertV.

The residual value method-a frequently used method for determining provisional values-calculates the land value as the difference between the expected proceeds after development and the total construction and development costs. It is used particularly for project development properties without comparable values. The method is sensitive to assumptions regarding costs and proceeds; even small changes in the parameters can lead to significant differences in value.

Auxiliary Value and Property Tax

As part of the property tax reform (effective 2025), the tax office will determine a property tax value for each property using standardized procedures. For properties where these procedures lead to obviously incorrect results, owners can demonstrate a lower fair market value (market value) through an appraisal. Such an appraisal may include a supplementary value if the standard methods are not appropriate. The chances of success are good if the methodology is clearly documented.

Practical Tip for Property Owners in Nuremberg

We recommend that owners of specialty properties in the Nuremberg metropolitan area-such as historic buildings in the Old Town, former commercial properties in Fürth, or properties with unusual lot shapes-consult a certified appraiser during the valuation process who can methodically derive the auxiliary value. A plausibly justified auxiliary value is significantly more robust in negotiations than a mere estimate.

Especially for tax valuation purposes (inheritance, gifting), an appraisal is worthwhile to correct the tax office’s standard value, which is often too high. In the Nuremberg-Fürth region, there are several Chamber of Industry and Commerce (IHK)-appointed experts who specialize in specialty real estate. We would be happy to put you in touch with the right expert.

Frequently Asked Questions

Is a supplementary value legally admissible?

A supplementary value can be used in court if it is derived in a comprehensible manner by a qualified expert and the inapplicability of standard procedures is justified. However, its probative value is lower than that of a regular market value appraisal. Courts scrutinize supplementary values particularly closely.

Can I challenge the property tax assessment using a supplementary value?

Yes. If the property tax value determined by the tax office is obviously too high and the standard methods do not apply to your property, you can file an appeal against the notice using an expert appraisal (which methodically derives an auxiliary value). The chances of success depend on the quality of the appraisal. The appeal must be filed within one month of the notice being served.

When is an auxiliary value insufficient?

For bank financing, notarized purchase agreements, and mandatory appraisals under Section 194 of the German Building Code (BauGB), an auxiliary value is generally insufficient. In these cases, a full market value appraisal in accordance with the recognized valuation methods of the German Real Estate Valuation Ordinance (ImmoWertV) is required. However, the auxiliary value can serve as a supplementary plausibility check.

How much does an appraisal with an auxiliary value determination cost?

That depends on the scope and complexity of the property. For a simple specialized building, an appraisal with an auxiliary value can be available starting at approximately 2,000 euros; for complex commercial properties or large-scale real estate, the costs can be significantly higher. However, compared to an excessive tax burden or a property sold below market value, an appraisal is usually a very cost-effective investment.

Distinction: Auxiliary Value vs. Market Value

The term “market value” is legally defined in Section 194 of the German Building Code (BauGB) as the price that could be achieved in ordinary business transactions based on the legal circumstances and the actual characteristics of a property. The auxiliary value attempts to come as close as possible to this value when standard methods fail-but it is not a full-fledged substitute. Appraisers explicitly label it as an auxiliary value and explain why the standard methods were not applicable. This transparency is crucial for the acceptance of the auxiliary value by authorities, courts, and banks.

Typical Properties with Auxiliary Value Determination

In addition to churches and monuments, auxiliary value methods are also used for other properties with little comparable data: bunker complexes, repurposed water towers, decommissioned sewage treatment plants, wind farms, and specialized public sector buildings. In the residential real estate sector, the auxiliary value occasionally arises for unusually shaped plots of land whose form makes normal development difficult, or for properties with unclear easement and right-of-way situations. Even for mixed-use properties where neither the income approach nor the cost approach alone yields a convincing result, an auxiliary value can serve as a plausible intermediate value.

Legal Framework

The ImmoWertV (Real Estate Valuation Ordinance) regulates the recognized valuation methods in Germany. It expressly permits appraisers to deviate from standard methods and employ supplementary methods if these are better suited to the individual case-provided that the methodology is fully and transparently documented. For tax valuation under the Inheritance and Gift Tax Act (ErbStG), the Valuation Act (BewG) prescribes specific methods; here, too, a deviating valuation may be substantiated by an expert opinion.

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