The property tax value must be calculated using the standardized income approach in accordance with the Residential Floor Space Ordinance (WoFlV). The Tax Court has ruled that basement rooms that have not been converted for residential use are to be excluded from the calculation as ancillary rooms.
Practical example:
The issue at hand is whether the area of a room located in the basement should be included. The living area on the above-ground floors of the single-family home totals 147.31 m² (interior space of 144.31 m² plus 25% of terrace area, which is 12 m²). In the basement, which is located entirely below ground level, there is a 26.44 m² room that is 2.10 m high, can be heated, and has a window measuring 0.45 m by 0.95 m. It receives daylight and is ventilated solely through a light well covered by a grille. In its assessment using the standardized method, the tax office based its calculation on a living area of 147 m² plus 26 m² of basement space, for a total of 173 m².
A single-family home must be appraised using the standardized income approach in accordance with the Residential Floor Space Ordinance (Section 250(2)(1) of the Property Valuation Act). According to this method, the property tax value is determined as the sum of the capitalized net income (present value of the net income) and the discounted land value. In the opinion of the Tax Court, the tax office incorrectly calculated the capitalized net income to the extent that it included the floor area of the basement in the relevant living space. The Tax Court points out that, for the purposes of determining the property tax value using the standardized income approach, the living space must be calculated in accordance with the Living Space Ordinance. Basement rooms, that have not been converted for permanent residential use, are not to be included as accessory rooms in this context (Section 2(3)(1)(a) of the WoFIV). The basement room was used as a storage room that could not be used for residential purposes and is therefore considered typical storage compartment It must be classified as such. It could not be used for residential purposes because it lacked flooring and had only one window that was insufficiently suitable for ventilation and lighting.
The prevailing view in the scholarly literature is also that the Relevant living space as defined by the Living Space Ordinance must be determined. This means that basements not to include, unless they have been converted for permanent residential use.