property tax

Which translation, when

Why

Property tax maps to Grundsteuer, the recurring tax a German owner pays on land and buildings, and two things need care. The first is not to confuse it with Grunderwerbsteuer: Grundsteuer is the annual charge for owning, Grunderwerbsteuer the one-off charge for acquiring, and English property tax reaches for the recurring one. Grundsteuer is a municipal tax, computed as a Grundsteuerwert times a Steuermesszahl times the local Hebesatz, GrStG, and a landlord may pass it to tenants as a Betriebskosten item, which the UK counterparts, Council Tax and business rates under the Local Government Finance Act 1992, allocate differently. The second is that the tax was reformed: the Federal Constitutional Court held the old Einheitswerte unconstitutional in 2018, and from 1 January 2025 a new Grundsteuerwert applies. There is no single national method, because most Länder use the federal Bundesmodell while several, among them Bavaria and Baden-Württemberg, use their own, and challenges to some models are still before the Federal Fiscal Court. So the current base and figures should be checked against the applicable Land and the current law before they are relied on.

Typical mistakes

• Property tax is the recurring Grundsteuer, not the one-off Grunderwerbsteuer on acquisition, so using the transfer tax for an annual charge, or the reverse, names the wrong tax.
• Since 1 January 2025 the base is the reformed Grundsteuerwert, the old Einheitswerte having been struck down, so pre-2025 valuations no longer describe the charge.
• There is no single national computation: most Länder follow the Bundesmodell, several use their own, so a single method or figure across Germany misstates it and the applicable Land must be identified.

What matters

Explaining the running costs of German property to a UK owner, the annual charge is Grundsteuer, kept distinct from the Grunderwerbsteuer paid once on purchase. Any figure has to name the Land and the reformed post-2025 base, GrStG, since the Bundesmodell and the separate Land models compute it differently and some are still under challenge.

Examples