Value update

Value Adjustment - A value adjustment is the revision of an assessed property value or unit value by the tax office when the value of a property has changed by a legally defined minimum amount since the last assessment. It serves to update tax assessments and ensures that property tax and other value-based levies are based on a current assessment basis. The legal basis is found in § 22 of the Valuation Act (BewG).

Legal Requirements and Procedure

A value update is carried out by the tax office if the new property value exceeds or falls below the most recently assessed value by more than 10% and the change in value reaches at least a certain absolute amount (Section 22(1) BewG). The revaluation always takes place at the beginning of the calendar year following the change-the so-called revaluation date.

Until the property tax reform, the old unit values based on 1964 (West) and 1935 (East) applied-the 2025 Property Tax Reform resulted in a complete revaluation nationwide based on current standard land values and building data. In Bavaria, the value-independent area model will apply starting in 2025, under which property tax is calculated exclusively based on land and building area as well as statutory equivalence figures. A traditional value update in response to market price changes does not apply here-instead, an area update must be submitted in the event of changes in area (expansion, addition, demolition, property division). In other federal states (federal model), the value-dependent update remains relevant.

Triggers and Effects of Value Adjustment

Typical triggers for a value adjustment are:

• New construction or extensive renovation of a building that significantly increases the building’s value
• Division or merger of properties (physical division, consolidation)
• Change in use - e.g., rezoning from commercial to residential use or conversion of the attic for residential purposes
• Significant building demolition or complete destruction due to fire, flooding, or other events
• New construction on a previously undeveloped property

Following the revaluation, the owner receives a new assessment notice, against which they may file an objection within one month. The effect primarily concerns property tax-if the property tax value increases, the annual tax burden rises accordingly. In cases of value reductions (e.g., demolition of a building or significant renovation backlog), the owner can apply for a downward revaluation themselves to lower the tax burden.

Relationship to the Property Tax Return and Tax Assessment

The value adjustment must be distinguished from the actual property tax assessment by the municipality: The tax office determines the property tax value (assessed value)-the municipality then calculates the property tax based on this by applying its assessment rate. In Nuremberg, the property tax B-assessment rate has been 555% (assessment rate of the City of Nuremberg). When the tax office updates the property value, the municipality does not need to issue a new property tax assessment-the changed assessment basis automatically affects the next annual assessment.

Owners are required to report value-related changes to the tax office without being asked (Section 228(2) of the Property Valuation Act). If an owner fails to report such changes-for example, following a significant addition-the tax office may apply the adjustment retroactively and demand back payments as well as interest.

Practical Tip for Property Owners in Nuremberg

We recommend that property owners in Nuremberg carefully review the notices regarding property tax valuation based on the new Bavarian land area model. Incorrect information regarding property area or building area-such as in the case of historically developed properties in Mögeldorf, Ziegelstein, or Laufamholz-can lead to an incorrect assessment and thus to excessive property tax.

Anyone who has made structural changes after the valuation date (January 1, 2022) (e.g., attic conversion, addition, partial demolition, basement conversion) should check whether an application for an area update must be submitted to the relevant tax office in Nuremberg-South or Nuremberg-North. We assist you in reviewing the floor area data and, if necessary, coordinate with your tax advisor - particularly in older apartment buildings with retrofitted attic conversions, discrepancies often arise between the reported and actual floor area.

Frequently Asked Questions

As the owner, do I have to apply for a value update myself?

As a rule, the value update is carried out ex officio by the tax office when new data becomes available to the office (e.g., through building permit applications, land registry changes, or declarations regarding property tax valuation). However, the owner may also apply for a revaluation on their own, particularly in cases of depreciation-such as after the demolition of a building, in the event of significant renovation backlogs, or following changes in floor area. The application should be submitted informally to the relevant tax office and should be supported by appropriate documentation (demolition permit, floor area calculation in accordance with the Residential Floor Area Ordinance).

How does the property tax reform affect value updates in Bavaria?

Bavaria has opted for the area model, which no longer calculates property value based on standard land values but exclusively on area and statutory equivalence figures. Consequently, traditional property value updates based on market price changes no longer apply in Bavaria. Updates are now only made in the event of changes to the actual floor area-such as through expansion, additions, partial demolition, or property subdivision. The new property tax assessment notices take effect as of January 1, 2025 and form the basis for the new property tax calculation until the next update.

Can I appeal a property value reassessment?

Yes, an appeal against the tax office’s assessment notice can be filed within one month of notification. The appeal must be submitted in writing to the relevant tax office and should provide specific reasons why the valuation is incorrect-such as incorrect area measurements, demolition work not taken into account, or incorrect classification of use. The appeal has no suspensive effect: Property tax must continue to be paid for the time being. If the appeal is successful, the notice will be corrected retroactively and any overpaid amounts will be refunded.

What happens if I fail to report a change that is subject to reporting?

Owners who have not reported a value-relevant change to the tax office risk a retroactive adjustment with corresponding back taxes and interest (currently 1.8% p.a. pursuant to § 238 AO). In the worst case, a deliberate failure to report can be considered tax evasion. We recommend automatically checking after every measure requiring a building permit whether there is a reporting obligation to the tax office.

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