As part of the 2025-2029 government program, the federal government plans to tax increases in value resulting from the rezoning of land. A so-called "rezoning surcharge" will be added to the profit from the sale of rezoned land and thus subject to additional taxation.
The background to this regulation is that rezoning (especially from grassland to building land) often leads to atypical increases in value. The rezoning surcharge is intended to address this and impose additional taxation. Taxpayers who benefit from such an increase in value should also pay an additional tax. The rezoning surcharge covers both business and non-business property sales, as well as corporations within the meaning of the Corporate Income Tax Act (KStG), such as associations or public corporations.
The rezoning surcharge is to amount to 30% of the positive income attributable to land. This is intended to take into account the increase in value resulting from the rezoning. The surcharge does not apply if a loss results from the sale of land or if the sale of the property is exempt from taxation under Section 30 Paragraph 2 of the Income Tax Act (EStG). The new regulation builds on the existing definition of rezoning in Section 30 Paragraph 4 Item 1 Sentences 2 and 3 of the Income Tax Act (EStG). The question of when a rezoning occurs can therefore be answered by referring to these provisions. A rezoning therefore occurs if there is a change in the designation after the last acquisition for consideration and this change enables development for the first time. This also applies if the rezoning occurs within five years of the sale but is economically related to the sale, or if the purchase price subsequently increases due to the rezoning. To avoid excessive tax burdens in the case of particularly value-enhancing rezonings, a limit is introduced: The sum of the capital gain and the rezoning premium may not exceed the actual sale proceeds.
With the rezoning surcharge, the federal government intends to tax the capital gains that regularly arise from the rezoning of grassland to building land. Whether the regulation will actually counteract an imbalance or merely serve to offset the budget deficit remains to be seen. For planned land sales from July 2025 onwards that result from rezonings from January 2025 onwards, the rezoning surcharge must be taken into account for tax purposes. Therefore, it is recommended that you familiarize yourself with the new legal framework early on.
28.05.2025