Property tax

The nationwide property tax reform and its effects in Hilden

2025 is the first year in which property tax will be calculated nationwide according to a new model. The reform was triggered by a ruling by the Federal Constitutional Court in 2018, according to which all properties had to be revalued by the tax authorities. These new assessments lead to changes. This video explains the reasons for the property tax reform, its effects and the decisions made in Hilden. We have also summarized the most frequently asked questions.

  • Background to the property tax reform

    In April 2018, the Federal Constitutional Court ruled that property tax must be recalculated as the previous valuations were outdated. Until 2024, property tax was calculated using standard values, which in western Germany were based on a valuation from 1964. The aim of the property tax reform is to ensure fair taxation based on current property values. This is intended to take appropriate account of the changes in value over recent decades.

  • What assessment rates has the Hilden City Council set?

    The assessment rates were adopted by the Hilden City Council on December 17, 2024 and have been in force since January 1, 2025, making use of the option to set different assessment rates for residential properties (e.g. detached and semi-detached houses, rental apartments) and so-called non-residential properties (e.g. commercial properties, undeveloped land).

    The assessment rates are as follows:
    Property tax A (agricultural land): 325 %
    Property tax B (residential land): 650 %
    Property tax B2 (non-residential land): 1,300 %

  • How are residential and non-residential properties differentiated?

    When determining the property tax assessment amounts, the tax office used different valuation methods to determine the value of the properties. Residential properties were valued on the basis of potential rental income using the income capitalization approach and all other properties using the asset value approach derived from the production costs. This allocation is the basis for the differentiated assessment rates.

  • Are the new collection rates revenue-neutral?

    No. The city council has decided to moderately increase property tax revenue from 15.5 million euros in 2024 to 17 million euros in 2025. This additional revenue is necessary to maintain social infrastructure despite increased costs.

  • Why was property tax revenue increased?

    The city is faced with a significant rise in expenditure - due to inflation and increased operating costs, among other things. In order to be able to continue offering social facilities, infrastructure and services, the property tax was increased moderately. Despite this increase, the draft 2025 budget as of 17.12.2024 still shows a deficit of 21.3 million euros.

  • Why differentiated collection rates?

    The federal property tax reform has resulted in value shifts:

    • The value of commercial real estate tends to be set lower.
    • In many cases, the value of residential real estate is set higher.

    To compensate for this shift, the state of North Rhine-Westphalia allowed cities to introduce differentiated assessment rates.

    The city of Hilden has used this option to mitigate a higher burden for residential properties. Without the differentiation, property tax B for residential properties would have to be increased from the current 650% to 830% in order to generate the same amount of property tax revenue.

  • How is property tax calculated?

    The property tax is based on the property tax assessment amount determined by the tax office. This is calculated from the information you provided in the declaration of assessment and the respective standard land value. The City of Hilden has no influence on this property tax assessment amount. This property tax assessment amount multiplied by the city's assessment rate results in the property tax to be paid.

  • Who is affected by the increase?

    Everyone who lives in Hilden and the companies in Hilden are affected, either directly as owners or indirectly via tenants' utility bills.

  • Are commercial properties particularly affected?

    Not across the board. Higher tax burdens often affect mixed-use properties, ancillary areas such as large gardens, garage yards or separate parking spaces.

  • Why are properties on which residential and non-residential properties are mixed calculated with assessment rate B2?

    According to previous experience, mixed properties that combine residential and non-residential use are classified by the tax office as non-residential properties. In this case, the assessment rate of 1,300 % (B2) is applied.

  • Who can I contact if I make a mistake in the classification or valuation of the property tax assessment amount?

    Please contact the responsible tax office in Hilden or a tax consultant.

  • How can I contact the Financial Services Office?

    The Office for Financial Services is currently receiving a large number of inquiries about payment methods and collection rates, among other things. Due to the high number of enquiries, it may take some time to respond. We ask for your understanding.
    Office for Financial Services

  • How does the city administration deal with objections?

    Appeals against property tax assessments are processed as quickly as possible. However, many appeals concern the property valuation, for which the tax office is responsible. If you are unsure, you should therefore contact them first.

    The city administration cannot change errors in the assessment. If the tax office announces a correction in the assessment, we will suspend the payment obligation until a corrected decision is made.