How is property tax calculated?

Property tax results from the formula assessed value × tax index × municipal multiplier. The assessed value is set by the tax office, the tax index is 0.31‰ for residential properties under the federal model, and the multiplier is determined by the respective municipality.

What is the difference between property tax and property transfer tax?

Property transfer tax (Grunderwerbsteuer) is a one-time tax incurred when buying a property. Property tax (Grundsteuer), on the other hand, is a recurring, annual tax on real estate that the owner must pay permanently.

Can I pass property tax on to tenants?

Yes, for rented apartments, property tax counts as recoverable operating costs under the Operating Costs Ordinance (Betriebskostenverordnung) and can be passed on to tenants via the utility statement. For owner-occupied property, the owner bears the property tax entirely.

Property Tax Calculator (Grundsteuer) — Free Calculator

Property tax (Grundsteuer) is a recurring, annually payable tax on real estate and therefore a permanent cost factor for every property owner. The 2025 property tax reform redefined the calculation. Our property tax calculator determines the annual burden based on the assessed value, the tax index, and the municipal multiplier (Hebesatz).

How to Use This Calculator

Property tax is calculated using the formula assessed value × tax index × municipal multiplier. Here's how to proceed:

Step 1: Enter the assessed value (Grundsteuerwert). You can find this in your assessment notice from the tax office.
Step 2: Enter the tax index in per mille. For residential properties under the federal model, 0.31‰ generally applies.
Step 3: Enter your municipality's multiplier (Hebesatz) as a percentage. This is set by the respective municipality and can be found on its website or in the notice.

Understanding the Results

The calculation breaks the property tax down into its components:

Base Tax Amount (Messbetrag): The product of the assessed value and the tax index. It forms the basis for applying the municipal multiplier.
Annual Property Tax: The base tax amount multiplied by the municipal multiplier. This is the amount you pay per year to the municipality.
Monthly Property Tax: The annual property tax broken down per month.
Quarterly Installment: Property tax is usually due in four quarterly installments (Feb 15, May 15, Aug 15, Nov 15).

Why Property Tax Matters for Investors

Unlike the one-time property transfer tax, property tax is incurred anew every year and permanently affects a property's cashflow. For rental properties, property tax can usually be passed on to tenants via operating costs, but it should still be factored into every profitability calculation. The municipal multiplier varies considerably from municipality to municipality and can range from a few hundred to over 900 percent. As a result, the property tax burden for comparable properties can differ greatly depending on location. With the 2025 reform, many municipalities adjusted their multipliers, so it is worth checking the current value. Investors should plan property tax as a fixed part of ongoing costs and consider it when choosing a location.

Tips

•Take the assessed value and the base tax amount from the tax office notices. Your municipality publishes the current multiplier (Hebesatz).
•Note that some federal states use a state model that differs from the federal model (e.g. Bavaria, Baden-Württemberg, Hamburg, Hesse, Lower Saxony). The calculation may differ there.
•For rental properties, property tax is generally passable to tenants as operating costs, so it does not necessarily reduce your return.

Property Tax Calculator (Grundsteuer)

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