Normal production costs (NHK)

Standard Construction Costs (NHK) are standardized cost indicators for the construction of buildings, used in the cost approach to real estate valuation. They are published by the Federal Ministry of Housing, Urban Development, and Construction (most recently as NHK 2010) and specify the average construction costs per square meter of gross floor area (GFA) or per cubic meter of gross volume (GV) for various building types and finish standards. The NHK form the basis for determining the building’s asset value.

Role of the NHK in the Cost Approach

The cost approach is one of three recognized valuation methods under the Real Estate Valuation Ordinance (ImmoWertV 2021). It is primarily used when sufficient comparative market data is not available-typically for owner-occupied single-family homes or specialty properties.

The building’s asset value is calculated as follows:

1. Determination of the building’s gross floor area (GFA)
2. Selection of the appropriate NHK value based on building type and standard of fit-out
3. GFA × NHK = construction cost (new construction value)
4. Deduct the age-related depreciation based on total useful life and remaining useful life
5. Result: building asset value

Added to the land value, this yields the preliminary asset value, which is adjusted to the regional market via an asset value factor.

Adjustment to the current construction price index is a crucial step: The NHK 2010 values are based on construction costs from 2010. Since construction costs have risen significantly since then, the appraiser must adjust the NHK value upward using the construction price index from the Federal Statistical Office. As a result, the calculated property values have risen significantly in recent years-even without the buildings themselves having increased in value.

NHK 2010 - Structure and Use

The NHK 2010 is divided into building types (e.g., single-family and two-family homes, multi-family homes, commercial buildings) and equipment classes (basic, medium, upscale, high-end). For each type and class, a cost index is specified, which must be adjusted to current price trends using the construction price index from the Federal Statistical Office.

In practice, the appraiser first determines the standard of finish using a point system (type of heating, bathrooms, window quality, flooring, etc.), derives the finish class from this, and reads the NHK value from the corresponding table. For a single-family home with a medium standard of finish, the NHK values-after adjustment to 2024-range from approximately 1,600 to 2,000 euros per square meter of gross floor area.

Limitations of the NHK as a Valuation Standard

The NHK values reflect average construction costs-individual features of a building (special materials, unusual floor plans, elaborate basements) are not fully captured by them. Furthermore, in times of rapidly rising construction costs, the NHK values may appear outdated due to a time lag. However, the appraiser has the option to apply surcharges or discounts for special features.

Another weakness: The NHK approach provides only the asset value-that is, the building’s intrinsic value. The actual market value may differ significantly from this, particularly in regions with high demand such as the Nuremberg metropolitan area. The asset value factor (market adjustment factor) established by the Appraisal Committee compensates for this difference and brings the asset value in line with actual market prices.

Practical Tip for Property Owners in Nuremberg and Franconia

Anyone looking to sell a house or have one appraised in Nuremberg or the Franconia metropolitan region will frequently encounter the NHK approach in appraisals by the Appraisal Committee or independent experts. However, the asset value alone says little about the actual market value-the market adjustment factor is the decisive factor.

In sought-after Nuremberg neighborhoods such as Erlenstegen, Schweinau-Süd, or St. Johannis, this factor is often well above 1.0, which means: The market pays more than the pure construction costs. We recommend always consulting a certified appraiser for a sound valuation and not relying solely on online calculators that provide NHK values without market adjustment.

Frequently Asked Questions

What is the difference between NHK 2000 and NHK 2010?

NHK 2000 was the previous version and was based on cost data from the year 2000. NHK 2010 is more current, has a different table structure, and allows for a more differentiated classification of equipment standards. In current appraisal practice, NHK 2010 is predominantly used, as it is anchored in the ImmoWertV 2021.

How are the NHK values adjusted to current construction costs?

The NHK values are extrapolated to the valuation date using the construction price index from the Federal Statistical Office (base year 2010 = 100). Due to the sharp rise in construction costs since 2015, this regularly results in a significant premium of 50-70% compared to the base values.

Can I calculate the NHK value myself?

The NHK 2010 tables are publicly available. However, without expert knowledge of how to correctly determine the gross floor area, the fit-out class, and the appropriate depreciation, it is difficult to perform a reliable calculation on your own. For reliable results, we always recommend a certified appraiser, especially if the appraisal is to be used for financing or inheritance purposes.

What role do the NHK play in the tax assessment for the tax office?

The tax office also relies on the asset value method for inheritance and gift tax purposes, using values that correspond to the NHK 2010. If sufficient comparable prices are not available, the tax office applies the asset value method using standardized construction costs. Since tax valuations are typically determined without an on-site inspection and are based on general assumptions regarding the standard of fit-out, they may differ significantly from the building’s individual circumstances. Owners who wish to prove a lower value in the event of inheritance or a gift may, pursuant to Section 198 of the German Property Tax Act (BewG), submit an expert appraisal that uses the NHK as a basis, incorporating realistic surcharges and discounts, as well as a correctly determined property value factor from the Expert Committee of the City of Nuremberg or the respective district. The difference between the tax office value and the value determined by the expert can amount to several tens of thousands of euros for older buildings in Nuremberg in need of extensive renovation-with a correspondingly significant tax impact.

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