Property Valuation
Online Value Analysis
Determine the market value of the property for tax purposes
Is the tax office valuing your inherited property too high? This can quickly cost you several thousand euros in inheritance tax. Learn how to defend yourself with the right data and prove the actual, fair market value.
With access to Google, BORIS, and Deep Research.
The tax office uses standardised assessment procedures that often result in a valuation that is 20-30% too high, and consequently, an excessive inheritance tax.
According to § 198 of the BewG, you have the right to demonstrate a lower property value through an appraisal or a recent sale.
A qualified appraisal takes into account value-reducing defects and can reduce the tax burden by thousands of euros; the costs for this are tax-deductible.
Anyone who inherits or receives a property as a gift is quickly faced with a high tax demand. The tax office often determines the market value for calculating the tax burden using standardized procedures, without ever having visited the property. This standardized valuation can exceed the actual value by 20% to 30%, as individual characteristics such as building damage or a backlog of renovations are not taken into account. For you as the owner, this means an unnecessarily high tax burden. However, you are not helplessly at the mercy of this. This article shows you how to review the value set by the tax office and determine the correct, lower market value of the property for the tax office using a qualified report, thus significantly reducing your tax burden.
The tax office uses highly generalized methods for valuation, which are established in the Valuation Law (BewG). Usually, the comparative value method, the real value method, or the income value method is applied, without an expert inspecting your property on-site. This method does not take into account any depreciating peculiarities such as a damp basement, outdated electrical systems, or noise pollution. The result is an estimated value that is often 15% to 20% higher than the actual market value. Since the reform of the Valuation Law in 2023, the valuations tend to be even higher. If you calculate the inheritance tax value online, you receive an initial indication of whether the assessed value is plausible. These standardised processes are the main reason why a critical examination of the tax assessment is essential.
The law provides you with a crucial opportunity for correction: the opening clause of § 198 of the Valuation Act (BewG). This provision explicitly allows you as the taxpayer to demonstrate a lower common value (market value) than that determined by the tax office. You bear the full burden of proof; a mere assertion is not sufficient. The tax office generally accepts three types of evidence to reassess the market value of the property:
A qualified market value appraisal from a certified expert.
A purchase price obtained within a year before or after the valuation date.
An expert opinion from the local appraisal committee.
Among these options, the expert appraisal is the most common and effective way to enforce a realistic valuation, as demonstrated by an appraisal in the case of an inheritance. This shifts the discussion from a general estimation to a fact-based analysis of your specific property.
A qualified market value appraisal is the strongest tool against an excessive tax assessment. To be recognised by the tax office, it must be prepared by a certified expert, for example, by a person accredited according to DIN EN ISO/IEC 17024. The cost of such an appraisal starts at around 2,000 euros and is tax-deductible as an estate liability. A reduction in value of just 40,000 € can already mean a saving of 6,000 € at a tax rate of 15%. Such an appraisal documents all value-relevant factors that the tax office ignores. Before commissioning a full appraisal, a digital evaluation, like one from Auctoa, can provide a quick and cost-effective assessment of whether the effort is worthwhile. This way, you know what your inherited house is really worth before taking further steps. The investment in an appraisal therefore pays off multiple times in most cases.
The standardised procedures of the tax office cannot reflect the individual condition of a property. A qualified appraiser, on the other hand, inspects on site and documents defects that significantly reduce the value. Even a single factor, such as an upcoming roof renovation, can decrease the value by over €20,000. The most commonly overlooked aspects include:
Construction defects and damage: Damp basements, cracks in the masonry, outdated heating systems or poor energy efficiency.
Legal encumbrances: Rights of residence, usufruct or easements registered in the land register that restrict use.
Maintenance backlog: Necessary renovations to windows, façades or sanitary facilities due within the next 5 years.
Special burdens: Listed building status, which makes renovations more expensive and restrictive.
Location disadvantages: Noise from a nearby main road, lack of infrastructure or a declining neighbourhood.
These points are crucial for accurately assessing the value of an inherited property and arguing with the tax office.
After receiving the notice of determination regarding the property value, you have only one month to file an objection. This deadline is crucial to meet, as the notice will otherwise become legally binding. Therefore, act immediately. Ideally, consult an expert within the first week after receiving the notice. The report itself can be submitted later, but the objection must be filed on time. An alternative is selling the property: if you achieve a sale price within a year of the inheritance that is below the value estimated by the tax office, this sale price serves as evidence of the lower market value. This is especially relevant in the context of the speculation period for inherited houses. To avoid missing deadlines and to choose the right strategy, Auctoa's ImmoGPT-Chat offers a free initial assessment in less than 60 seconds.
The blanket property valuation by the tax office often leads to an excessive inheritance or gift tax. However, the law gives you a clear right under § 198 BewG to prove a lower and thus fairer value. A qualified market value appraisal is your most effective tool, considering all individual defects and charges of your property. The costs for the appraisal are generally significantly lower than the potential tax savings, often exceeding €10,000. So, don't hesitate to critically review the tax office's notice and take action. A data-driven, neutral evaluation protects your assets. Get in touch now, without obligation, to explore your options.
Stiftung Warentest explains how tax offices determine the market value of real estate and which aspects are relevant.
The Federal Statistical Office provides comprehensive information on the construction and property price index, which is important for value assessment.
The Federal Statistical Office offers detailed tables on current house and land prices that can serve as reference values.
A press release from the Federal Statistical Office provides current data and analyses on relevant economic indicators, including property prices.
The Federal Ministry of Finance offers an official application for the purchase price allocation of plots, which can be helpful in tax assessments.
Wikipedia provides a basic definition and explanation of the term "market value".
When do I need to determine the market value of a property for the tax office?
The determination of the market value is always necessary when a property is part of an inheritance or gift. The tax office will require you to submit a declaration of determination to calculate the inheritance or gift tax based on this.
Can I prepare the market value report myself?
No, a self-prepared report is not accepted by the tax office. Proof of a lower market value must be provided through a qualified document, such as by a certified expert or the local valuation committee.
What is the difference between market value and assessed value?
The market value (or fair value) is the sale price that can be achieved on the market. The assessed value was an outdated tax assessment basis that has been replaced by the new property tax values within the framework of the property tax reform. For inheritance tax, only the market value is relevant.
How long is a market valuation report valid?
A market valuation report is a point-in-time evaluation, meaning it represents the value of the property at a very specific date. For the tax office, the valuation date (e.g., the date of death of the deceased) is crucial. The report should reflect this date and be prepared promptly.
Does renting out a property reduce its taxable value?
Yes, for properties rented for residential purposes, the law grants a valuation discount of 10 percent. This means that only 90 percent of the determined market value is used for the calculation of inheritance tax.
What happens if I miss the appeal deadline?
If you miss the one-month appeal deadline, the value determined by the tax office becomes legally binding and can no longer be contested. You will then have to pay the potentially excessive tax demand based on it. Therefore, prompt action is crucial.
