Road construction fees

Road Improvement Contributions - Road improvement contributions were municipal fees through which municipalities required property owners to share in the costs of renovating, improving, or expanding existing roads - in Bavaria, they were abolished in 2018 by Art. 5a of the KAG.

Legal Basis and Abolition in Bavaria

The legal basis for road construction contributions was the Municipal Tax Act (KAG) of the respective federal state. In Bavaria, municipalities could, on this basis, pass on up to 80 percent of the costs for road construction measures to adjacent property owners. The amount of the contribution was based on the property area, the type of building use and the extent of use of the respective property, as well as the residents’ share of the total use of the road.

As of January 1, 2018, the Bavarian State Parliament prohibited the collection of road construction contributions with the introduction of Section 5a KAG Bavaria. Since then, Bavarian municipalities have been prohibited from issuing new contribution notices. For property owners, this means: Since 2018, no resident contributions have been required for road repairs or renovations in Bavaria-the costs are borne by the municipality, supported by state subsidies.

It is important to distinguish this from development contributions under §§ 127 ff. of the German Building Code (BauGB). These pertain to the initial construction of a development facility (such as a new road in a new development area) and continue to be levied. Road improvement contributions, on the other hand, referred to the renovation or improvement of an existing road. Anyone purchasing a property in a new development area must therefore still expect to pay development contributions-even in Bavaria.

The political debate over the abolition had been intense nationwide. Many property owners, particularly older people with low incomes, had fallen into financial distress due to sudden contribution notices ranging from 10,000 to 30,000 euros. Bavaria was one of the first major federal states to consistently abolish the contributions. The abolition is permanently enshrined in policy; a reintroduction is considered unlikely.

Legacy Cases and Historical Liabilities

Although no new road construction fees may be levied since 2018, legacy cases may still be relevant. Fee notices that became legally binding before the effective date remain valid. Property owners who have received such a notice remain obligated to pay. Installment payment agreements from the period prior to the abolition also remain in effect.

When purchasing an existing property, it is therefore advisable to check whether any outstanding road construction contributions remain as legacy liabilities. Such liabilities can be addressed in the purchase agreement-for example, through an exemption clause or by offsetting them against the purchase price. Reviewing the local tax assessment notices and consulting the relevant building authority will provide clarity.

In other federal states-particularly Saxony, Thuringia, Saxony-Anhalt, Mecklenburg-Western Pomerania, and North Rhine-Westphalia-road construction contributions remain possible depending on state law. Anyone purchasing real estate in these states should be familiar with local regulations and factor potential resident contributions into the purchase calculation.

Especially when appraising existing properties for purchase or mortgage financing, the issue of outstanding resident contributions is a point that many buyers underestimate. Technically, this is not a lien secured in the land registry-the claim does not appear there. Anyone who checks only the land registry may overlook this liability. A written inquiry to the building authority of the relevant municipality is the surest way to clarify the matter.

Practical Tip for Nuremberg and Franconia

In the Nuremberg metropolitan region, the abolition of road construction fees is particularly noticeable in the outlying districts and surrounding municipalities, where extensive road renovations in recent decades have burdened residents with fees-in some cases amounting to five-figure sums. Anyone purchasing an existing property in municipalities such as Schwabach, Feucht, or Lauf an der Pegnitz should nevertheless check with the relevant building authority to see if there are any outstanding notices or if development contributions for planned infrastructure projects are pending.

We recommend conducting this check before signing the purchase agreement to ensure that no unexpected additional charges subsequently increase the purchase price. Particularly for older properties that were subject to municipal road construction projects in the years prior to 2018, there may still be outstanding installment payment obligations that must be taken into account when determining the purchase price.

In Nuremberg itself, numerous streets were renovated in the 2000s and 2010s as part of the Stadtumbau-West program as well as through regular maintenance measures. At that time, owners on affected streets received notices, some of which have not yet been fully paid in individual cases. For real estate transactions involving inner-city properties, we therefore recommend as a standard practice to obtain information from the City of Nuremberg’s Service Office.

Frequently Asked Questions

Can road construction contributions still be levied in Bavaria today?

No, since January 1, 2018, the collection of new road improvement contributions in Bavaria has been expressly prohibited by Art. 5a KAG. However, notices issued prior to this date remain legally valid. In other federal states, road improvement contributions may still be levied depending on state law-the abolition applies exclusively to Bavaria.

What is the difference between road construction contributions and development contributions?

Road construction contributions pertained to the renewal or improvement of existing roads and were levied on the basis of the KAG. Development contributions under Sections 127 et seq. of the BauGB, on the other hand, pertain to the initial construction of development infrastructure such as roads, paths, or squares in new development areas. Development contributions are not affected by the abolition and will continue to be levied in Bavaria. Buyers of properties in new development areas must therefore expect to pay development contributions-these can amount to several thousand euros per property, depending on the location and development standard.

When buying real estate, how can I tell if there are any outstanding road improvement contributions?

Outstanding contribution claims are not recorded in the land register but are determined by the municipality’s official notices. We recommend obtaining information about resident contributions from the relevant building authority. The seller is also obligated to disclose any known encumbrances. The purchase agreement should include a provision specifying who is responsible for any outstanding contributions.

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