Property tax: what is it?

What is property tax (real estate): Simply explained?

Property tax is an annual tax levied on the ownership of land or real estate. It is used to finance public services such as road construction, fire departments, police and schools.

The amount of property tax is usually calculated on the basis of the estimated market value / Verkerhwert or the standard land value of the land. In some regions, the property tax may also be based on the size or condition of the building located on the property.

The property tax can vary depending on the state or municipality in the USA. In Germany, it varies from state to state.

As a rule, owners or beneficiaries must pay the property tax annually or quarterly.

Property tax comparison

Property taxes in the U.S. and Germany differ in several important respects:

1. Purpose of the tax
2. Calculation and basis
3. Tax rate and amount
4. Payment and deadlines

Purpose of the tax

Property tax in the USA is used to fund public services such as schools, roads and public safety. In Germany, the property tax is used to tax the ownership of a piece of land.

Calculation and basis

In the USA, property tax is calculated on the basis of the estimated market value of the land. In Germany, property tax is calculated on the basis of the value of the land, which is derived from the standard land value and the building expense.

Tax rate and amount

The tax rate for property tax in the USA varies from state to state and from municipality to municipality. In Germany, the tax rate for property tax is set by law and is generally between 300 and 600 percent of the standard land value.

Payment and deadlines

Property tax in the USA is due annually and must be paid by the owners. In Germany, property tax is generally due quarterly and can also be paid by the owners or by the beneficiaries of the property.

Overall, the differences between property taxes in the U.S. and Germany are significant, but they serve both countries to fund public services.

Facts at a glance: Tax table

Here again in direct comparison, the property tax in the U.S. and in Germany:

This table contains the main differences between the property tax!

The most important links: Property tax

Here are the most important links for Germany and the USA with a focus on the states of New York and California.

• Property tax (Germany)
• Property tax (New York)
• Property Tax (California)
• …
• Taxes USA (real estate purchase)

Selling: Reasons from business closure to inheritance

Age, financing pressure or spontaneous inheritance – When a forest property is to be sold or has to be sold, it is therefore also often an emotional matter for the seller side. As I said, quite different from typical building land.

Nevertheless, it happens that a property is to be sold or has to be sold. Sometimes it is a financial reason, for example due to ongoing financing that requires liquidity, sometimes it is a spontaneous inheritance or an early gift…

What to do with a forest plot?

Location of the property – Especially if the property is not in your own region and is 200 km, 300 km or even further away from your home.

When the time comes, it’s on to the big question:

How do I sell (m)a forest plot?

Those who have not had any experience in selling real estate or land face a lot of challenges:

• How does a land sale work?
• What is the very, very first step?
• Can any broker sell forest land? In terms of personal network and expertise
• What are the typical mistakes when selling real estate?
• What taxes are due on the sale?
• …

Many rely on a regional real estate agent whom they know from their personal circle of friends, for example, or have received as a recommendation.

But, does this real estate agent have the right contacts in his network? In the end, your forest plot will only end up on various portals and accordingly everyone will know that your forest plot is for sale.

Is that what you want?

Tip: Trade your woodland property off market.

Forest valuation: Valuation of forests

What is a spruce forest still worth? A typical question, especially if you yourself have not been active in trading for a while and / or do not have time, for example because it is a small part of your own investment portfolio.

The condition of the forest is of course the criterion for the offer price, but also for the ultimate selling price of your forest. Has the forest been maintained or is it lying fallow? Location, transport connections but also the condition of the terrain are further value factors.

Forest evaluate, among others by:

• Condition of the forest
• Sustainable care of the forest
• Soil quality; forest soil expertise
• Location and transport links
• Condition of the terrain

Some factors increase the price, others decrease it. The valuation should always be carried out by an expert, i.e. a surveyor. The geotechnical expert, a civil engineer or geologist, prepares the soil expertise on site.

Selling forest land: Expiration

Of course, at this point we can’t give you a one-to-one guide to how land sales work in each individual case. Especially when it comes to the forest floor, there are still special factors to consider. But to give you a rough idea, we would like to refer you to our guide to selling land.

Checklist: Fast track forest sale

That’s how it works:

1. You should allow sufficient time for your forest sale
2. Valuation by an expert
3. Broad marketing on portals OR targeted off market sales
4. Credit assessment and buyer selection
5. Purchase contract and notary appointment

Here we show the different phases, from the first step, to the purchase contract and the settlement.

• Sell land

Sell the land and the spring?

Anyone who already owns land is familiar with the subject, but anyone who has spontaneously come into possession of their own forest land, as described for example by inheritance, divorce, donation, has many questions! It becomes particularly interesting when the forest plot not only has good quality soil, but also its own water source.

Sell water source: special case

With sufficient capacity (millions of liters / year), you have quite an interesting piece of land, for very many investors. Would you have thought of buyers from the food industry before the sale? Especially large food companies are very hot on quality water sources, because water sources are one of the most sought-after raw materials today. Just think of the water shortages that already exist today, even in countries like Spain or South Africa, when there is no water from the ground for weeks in the summer.

If you happen to have come into possession of a water source and are wondering, what do I do with it? Read more about the topic here:

• Sell water well