Property owners now have until January 31, 2023 to file their property tax returns. But that shouldn't be a reason to put off the necessary information for the tax office. Because the lead times are long.
The property tax return is complex. So it's no wonder that only around 20 percent of house and apartment owners submitted their property tax returns in October. The federal and state governments had little choice but to extend the deadline by three months.
That's probably the main reason the majority of homeowners were still behind in October. Strangely enough, the necessary data and information have been available to the tax offices for years. The only thing missing is the necessary linkage. If you please, let the taxpayers do that.
Either way, anyone who is required to file a property tax return should start today rather than tomorrow. Because not only the gathering of the necessary data is difficult, the corresponding transmission to the tax office is by no means trivial.
Like income tax, property tax can also be submitted via the online portal of the tax offices, ELSTER. Paper forms are only allowed in Bavaria and Lower Saxony. At times, however, there were considerable difficulties at ELSTER in the form of error messages and terminations. That's not really surprising. After all, 36 million citizens are obliged to submit a property tax return. Even if only 20 percent of taxpayers have tried it, that's still more than seven million. Germany, which is only making slow progress in digitizing its administration, is obviously overwhelmed.
However, according to the financial authorities, ELSTER is now working again. However, users who want to use the portal first need access. Users should allow up to two weeks for this. In addition, ELSTER is considered to be comparatively complex, and quite a few users have difficulties finding their way around the portal.
In addition to ELSTER, there are a number of private portals that can be used to create and submit property tax returns. The providers include WISO, Wolters Kluwer and the Bundesanzeiger Verlag. Overall, they are considered to be more intuitive and easier to use than ELSTER. They cost money for that. And these portals are not completely trivial either. Some software has to be installed first. In addition, ELSTER access is required for the online platform of the Bundesanzeiger Verlag, for example.
This also applies to the property tax return portal for private property (grundsteuer-fuer-privateigentum.de), which the Federal Ministry of Finance launched. Anyone who does not yet have ELSTER access needs an activation code. In order to receive this, users should allow around two weeks for this as well. In addition, the site can only be used in the federal states that calculate the property tax according to the so-called federal model. Baden-Württemberg, Bavaria, Hamburg, Hesse and Lower Saxony are not included.
Taxpayers can of course also contact their tax advisor. These should be routine in the property tax return and when using ELSTER. However, there is currently a great rush for tax consultants.
Either way - taxpayers should prepare the information with the greatest care. Mistakes can lead to higher bad payments for years. One of the biggest sources of error is an incorrect or excessive calculation of the living space. And this is by no means easy either.
The living area includes all building areas that are used for living. Attics, basements, storage rooms or drying and heating rooms are usually not included. Exceptions only apply to attics or basements that have two escape routes, where the ceiling has a minimum height and where there are large windows.
The bathroom, the guest toilet or the kitchen and corridors, on the other hand, are considered living areas. However, only the inner surfaces are counted, walls are not included. As with a rental agreement, areas with a ceiling height of one to a maximum of two meters only count for half. If the ceiling is even lower than one meter, you don't have to take the corresponding area into account. Finally, there are so-called usable areas, such as an office or workshop, which are used commercially.
Regardless of how property owners file their property tax returns, they should invest enough time to prepare them correctly and on time. Otherwise it can become unnecessarily expensive.
dr Michael Bormann is a tax expert and has been a founding partner of bdp Bormann Demant since 1992
