Under German law, the owner of a property can be required to pay a so-called development contribution. This is not a general tax, but a special tax which is only levied on certain property owners and which benefits the local community. Legal basis are §§ 133 of the Baugesetzbuch.
Example: road development or public parks
With the help of a development contribution, for example, road construction, the installation of street lighting, but also parks in the immediate neighbourhood of the respective properties are financed.
Scale Value increase of the property
The development contribution may only be levied to the extent that the value of the property is increased by improvements in the neighbourhood of the property. In this regard, the development fee is levied to the extent that the value of the property is increased as a result of a municipal infrastructure measure.
Amount of the development fee
In connection with an intended purchase of a property, the potential problems of a development contribution should not be forgotten. Such contributions can easily amount to 10% of the value of the land plot.
The local authority has the possibility to levy development contributions for planned infrastructure measures both as an advance payment as well as to refinance these measures only after the implementation of such measures by means of the levying of contributions.
Sometimes it happens that the owner of a property wants to evade the development contribution by selling it. It may be then deliberately concealed that a corresponding contribution could soon be levied for the property. This can lead to unpleasant surprises for the prospective buyer.
Regulations in the purchase contract
Therefore, the purchase agreement regularly contains provisions to the effect that the seller is still liable for development work that has already begun, regardless of the date on which the fee is charged.
Checking the legality of the Bescheid
Often the levying of the development contribution is also legally doubtful. This is because the legal requirements for such contributions and in particular their calculation are rigid. In the phase shortly after the purchase of the land, the buyer is therefore often faced with the difficult question of to what extent he wants to assert his rights against the levied contribution only against the authorities, only against the seller or against both.