Tax valuation of real estate

If real estate is included in the estate or is transferred during a person's lifetime, the tax office generally requires a tax valuation of the transferred or inherited real estate.

The so-called common value - comparable to the market value - must then be determined for the real estate in question on the respective transfer date. This value is not necessarily identical to the market value of the property. Rather, the Valuation Act (BewG) provides various valuation methods for determining the value, depending on the type of property:

• Comparative value method

• asset value method

• Income capitalization approach
  

Comparative value method

In the case of detached and semi-detached houses and owner-occupied apartments, the so-called comparative value method is initially used, provided that the relevant local expert committee can provide corresponding comparative values. In some cases, the expert committees do not provide comparative values for a complete valuation according to the comparative value method, but they do provide comparative factors in which the respective year of construction, the living space, the standard land value zone or similar criteria can be used to determine a comparative value.

Material value method

However, if the expert committee does not provide any comparative values or factors, the tax valuation of detached and semi-detached houses and condominiums is carried out using the asset value method. Among other things, various features, the year of construction and the modernization status of the property are relevant for this. The asset value of the transferred property is then determined on the basis of these criteria.

Income capitalization approach

For apartment buildings, on the other hand, the Valuation Act provides for the so-called income capitalization approach. This requires, among other things, information on the annual net cold rents, year of construction, location, etc. for the valuation. Our specialist lawyers for tax law in Frankfurt and Berlin have many years of experience in tax valuation and will be happy to assist you with the tax valuation of real estate. This may be in the context of an inheritance tax return to be submitted or if you intend to give away real estate during your lifetime and would like to know the value of the property in advance.