Landlords have until 31 March 2022 (cut-off date) to apply to the relevant municipality for a land value tax (Grundsteuer) waiver for 2021 if they experienced a sharp drop in their rental income in the previous year. The prerequisite is a significant reduction in income for which the taxpayer is not responsible. This can be caused by, for example, fire or flood damage, insolvency of the tenant or losses due to rental nomadism. In particular, COVID-related payment defaults may result in a shortfall in income that may justify a land value tax waiver.

There is no prospect of a waiver if the landlord is responsible for the reduction in income, e.g. because he gave notice to the tenant during the waiver period or if necessary renovation work was not carried out (in good time).

The benchmark for determining the reduction in income is the estimated usual annual gross rent. In the event of a shortfall of more than 50% of the rental income, 25% of the land value tax is waived under the current provisions. If no rental income is received, 50% of the land value tax is waived.

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