Planning
Sanierungsgebiet: buying in a German redevelopment area
Buying in a German Sanierungsgebiet: the land register note, council approval of the sale, the price check and the levy that can arrive years later.
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In April 2011 Berlin lifted the "Prenzlauer Berg – Winsstraße" redevelopment area in the district of Pankow. It then charged the owner of a 341 m² plot a redevelopment levy: land value before redevelopment €721/m², after €798/m², an increase of €77/m². That is 341 × 77 = €26,257. The owner went all the way to the Federal Administrative Court. In its judgment of 25 March 2025 (4 C 1.24) the court agreed that the owner's own expenditure could not be offset under section 155(1) no. 2 of the Federal Building Code, but sent the case back to the Higher Administrative Court for a fresh look.
Fourteen years after the area was closed, a five-figure sum that never appeared in any purchase price was still being argued over. If you are buying a flat, house or plot in an older German town centre, there is a fair chance it lies in a Sanierungsgebiet (formally designated urban redevelopment area). This guide explains what that means for a buyer: council approval of the sale, a check on the price, and a levy that can land on you after you have moved in. It is general guidance; the notary handles your contract and the town gives you the numbers.
Key German terms
| German | Meaning |
|---|---|
| Sanierungsgebiet | area formally designated by the town for urban redevelopment, by bylaw (Satzung) |
| Sanierungsvermerk | note in the land register (Grundbuch) that the plot is in such an area |
| umfassendes / vereinfachtes Verfahren | full / simplified procedure; only the full one carries the levy |
| Ausgleichsbetrag | redevelopment levy: the rise in land value caused by the redevelopment |
| Anfangswert / Endwert | land value without / with the redevelopment |
| Sanierungsträger | agency running the redevelopment for the town |
Source: Figures from this guide, documented under “Sources”
How to tell if a property is in one
The town designates the area by bylaw, which becomes binding on publication (section 143(1) BauGB). The town then notifies the land registry, which enters a Sanierungsvermerk (section 143(2)), in section II of the land register. It is deleted after the bylaw is lifted (section 162(3)).
The note is the clearest sign, but not the only one. It is missing where the town used the simplified procedure and excluded the approval requirement. And it can still be there after the area has been closed, if the levy has not yet been charged.
Check three places:
- Land register extract, section II (Abteilung II). Your notary will pull one; you can also apply yourself, see our guide on land register extracts.
- The town's website, usually under Stadterneuerung or Städtebauförderung: area map, bylaw, procedure type, planned closing date.
- An email to the planning office or the Sanierungsträger asking: full or simplified procedure? When will the area be closed? Is there a zone valuation of land value increases?
Full or simplified: the question that decides everything
A town can exclude the levy rules (sections 152–156a BauGB) in the bylaw; this is the simplified procedure (section 142(4)). Then there is no levy, and the town may also drop the approval requirement. Under the full procedure, everything below applies.
Hurdle one: the town must approve the sale
In a formally designated area, written approval of the town is required, among other things, for the sale of a plot or a hereditary building right, for creating a charge on it such as a mortgage, for the purchase contract itself, for public-law building encumbrances (Baulasten) and for subdivision (section 144(2) BauGB). Without approval, ownership does not pass, and until the decision the contract is provisionally ineffective. The notary applies for it, together with approval of your bank's land charge, which also needs it.
The town has one month from receipt to decide and can extend this by interim notice; the extension must be issued before the month runs out and can add at most three months. If the town does not decide in time, approval is deemed granted (section 145(1) with section 22(5)). A mere note saying the review is taking longer does not stop the clock. The town may refuse only if the sale would make the redevelopment impossible, much harder, or run against its aims (section 145(2)).
For buyers paying from abroad: schedule the purchase price due date after approval. German purchase contracts usually make payment due only when the notary confirms all approvals are in, so plan your currency transfer around that, not around the signing date.
Hurdle two: the price check
Under section 153(2) BauGB, a price above the value the land would have without the prospect, preparation or carrying out of the redevelopment counts as making the redevelopment much harder, and the town may refuse approval.
The logic: the uplift created by the redevelopment is meant to go to the town through the levy, not to the seller. If you pay a price that already includes the future uplift, you may pay it twice: once to the seller now, and again to the town as a levy later.
So before signing:
- ask the town for the land value unaffected by redevelopment (sanierungsunbeeinflusster Bodenwert) for the plot or zone; some towns publish special standard land values for redevelopment areas;
- for a built property, ask the town how it splits the price between land and building for this check;
- if the agreed price is well above that value, expect questions, and ask the notary to give you a right to withdraw if approval is refused.
The levy: how it is calculated
After the redevelopment, the owner pays a levy equal to the redevelopment-related increase in land value (section 154(1) BauGB): end value minus initial value (section 154(2)), assessed under section 40 of the Real Estate Valuation Regulation (ImmoWertV). Only the land counts, not the building.
Levy = (end value − initial value) in €/m² × plot area
Berlin, Winsstraße: (798 − 721) × 341 = €26,257.
Same area, two valuations: Radebeul-West
Radebeul, near Dresden, published new zone values for its "Zentrum Radebeul-West" area in its October 2024 gazette (valuation date 1 January 2024), next to the 2018 figures. For zone 1 (northern Bahnhofstraße) the increase fell from €8.11/m² to €3.48/m²; zone 2 from €2.93 to €1.13; zone 3 from €6.19 to €2.68.
On a 600 m² plot in zone 1: 600 × 8.11 = €4,866 on the old valuation, 600 × 3.48 = €2,088 on the new one. The town offered early settlement until the end of 2024 with a 5% discount, which would have brought it to €1,983.60. The area covers about 7.4 ha around Bahnhofstraße and was designated in 2016. According to the 2024 gazette, the bylaw was not to be lifted before 31 December 2025; ask the town whether that has happened since.
Between Radebeul's €3.48 and Prenzlauer Berg's €77 per m² lies a factor of more than twenty. Only the latest valuation for your zone tells you which end you are at.
Who pays: seller or buyer?
The law says "the owner". The levy is due after the redevelopment is completed (section 154(3)), that is, when the bylaw is lifted or the plot is released (sections 162, 163). Towns tell residents that the person liable is whoever owns the plot when the bylaw is lifted; the town of Zschopau says so in its FAQ. Payment falls due one month after the assessment notice (section 154(4)).
For you as buyer:
- Buy before the area is closed, and you will normally be the owner at closing and therefore liable, even though most of the uplift happened on the seller's watch.
- Buy after closing but before the notice, and the liability may already sit with the seller. The levy is not a public charge on the land (section 154(4) sentence 3 BauGB), so a liability that arose with the previous owner does not pass to you with the plot. Still ask the town and write it into the contract.
- German notaries are neutral. A notary does not have to advise you on the levy or on price, as notaries themselves point out. You have to ask for the contract clause.
Typical solutions: the seller indemnifies you; the price is reduced by the town's estimate; or the seller settles early before the sale. According to Zschopau's guidance, once the seller has agreed and paid early settlement, the next owner owes nothing.
If immediate payment is unreasonable, the levy can be converted into a repayment loan at no more than 6% interest (section 154(5)).
The upside: tax depreciation for refurbishment
Refurbishing a building in a formally designated area can bring enhanced tax depreciation:
- Landlords (section 7h EStG): up to 9% a year of eligible refurbishment costs in the year of completion and the following seven years, then up to 7% for four years: 100% over twelve years.
- Owner-occupiers (section 10f EStG): up to 9% a year for ten years, deductible like special expenses, only in years of owner occupation.
You need a certificate from the town; many towns expect the works to be agreed with them before they start. New builds do not qualify, and subsidised costs are excluded.
Buying a flat that a developer is still refurbishing? The part of the price that covers eligible works can qualify too, but only for works carried out after the purchase contract became legally effective (section 7h(1) sentence 3 EStG). Work finished before you signed does not count. A notarised offer that you accept only after its binding period has expired does not fix that date (Federal Fiscal Court, judgment of 19 February 2013, IX R 32/12).
If you are not resident in Germany: these allowances only help against income taxed in Germany. If you pay no income tax in Germany, they do nothing for you. Ask a German tax adviser before you put them into your numbers.
Where towns publish the numbers
Many towns put area maps, repeal decisions and zone valuations online. Dresden shows how to look: for the Hechtviertel redevelopment area (26.9 ha, redevelopment 1993–2020) the bylaw was repealed on 20 November 2020 and the zone valuation for the levy dates from 2021; for the Äußere Neustadt the repeal decision came on 28 September 2023 and the zone valuation in 2025. The valuations are linked from the city's page on levies.
How to do it for your plot, even without fluent German:
- Search the town website for Sanierungsgebiet, Stadtsanierung or Ausgleichsbetrag; the area map shows whether the parcel is inside.
- Note the bylaw date and the procedure (full or simplified, umfassendes or vereinfachtes Verfahren).
- Ask whether the area has been, or will soon be, repealed (aufgehoben). The closer the repeal, the closer the levy notice.
- Ask for the latest zone valuation (Zonengutachten) and multiply the zone value by your plot area.
- Ask the town to confirm the estimate in writing, or to offer an early settlement (Ablösevereinbarung).
Most towns answer email enquiries in German only; a short, factual message with the parcel number (Gemarkung, Flur, Flurstück) gets the quickest reply.
When the answer is bad
A high levy is expected after you buy. Price it in, or have the seller indemnify you in the contract. Early settlement before the repeal (section 154(3)) gives certainty; some towns give a discount for it, Radebeul for example 5% for settlement by the end of 2024.
The levy notice has arrived. It is payable one month after notification (section 154(4)). If you cannot pay at once, you can apply to convert it into a repayment loan at no more than 6% interest (section 154(5)). Your own expenditure that lawfully increased the land value is credited, and the town may waive the levy in individual cases (section 155).
The town refuses approval because the price is too high (section 153(2)). Reduce the price to the value unaffected by redevelopment, or withdraw; put that right of withdrawal into the contract.
You think the valuation is wrong. The Winsstraße case shows it can be worth challenging: in 2025 the Federal Administrative Court set aside the lower court's ruling. An objection or court action is possible; the deadline is in the notice's instructions on remedies (Rechtsbehelfsbelehrung), usually one month, so act quickly even if you are living abroad at the time.
You bought to refurbish and the tax certificate is refused. The depreciation under section 7h or 10f of the Income Tax Act depends on the town's certificate; agree the works with the town before you start, in writing. Without that prior agreement, the certificate can be refused even for works that would otherwise qualify, and the tax benefit is lost.
Checklist before the notary appointment
- Land register section II: redevelopment note yes/no, date.
- Town: full or simplified procedure, planned closing date, latest zone valuation, estimated levy for the parcel.
- Price against the land value unaffected by redevelopment.
- Contract: who bears the levy, indemnity or price reduction, withdrawal if approval is refused.
- Refurbishment plans agreed with the town before works start.
- Other approvals and pre-emption rights: see our guide on pre-emption and approvals; purchase costs in general: costs and taxes; buying from abroad: our guide.
Source: See a sample report
The GrundCheck report shows your parcel with its development plan, standard land value, protected areas and flood zones, each with source and date: €29 in one language, €39 in English and German. Put its standard land value next to the town's initial value; the levy itself only the town can calculate. Select the plot on the map → · See a sample report
For the parcel you are looking at now, the report gives the plan zone and the standard land value with its reference date, a starting point for your email to the town. Order the report for this plot → · See a sample report
Sources
- Dresden, levies in redevelopment areas, dresden.de; Building Code sections 154(3)–(5), 155, gesetze-im-internet.de, accessed via search engine 2.11.2026.
- Federal Building Code (BauGB), sections 142, 143, 144, 145, 153, 154, 155, 162, gesetze-im-internet.de and neighbouring sections, accessed 1.11.2026.
- Real Estate Valuation Regulation 2021, section 40, gesetze-im-internet.de, 1.11.2026.
- Income Tax Act, sections 7h and 10f, gesetze-im-internet.de (1), gesetze-im-internet.de (2), 1.11.2026.
- Federal Administrative Court, judgment of 25.3.2025, 4 C 1.24, bverwg.de (1); press release 22/2025, bverwg.de (2), 1.11.2026.
- Town of Radebeul, gazette October 2024, radebeul.de, 1.11.2026.
- Town of Zschopau, FAQ on the redevelopment levy, zschopau.de, 1.11.2026.
- Municipality of Mehring, guidance on redevelopment approval, gemeinde-mehring.de; Ottobeuren, guidance on approvals in redevelopment areas, ottobeuren.de; Bavarian case law, BeckRS 2024, 33681 (headnote), gesetze-bayern.de, accessed via search engine 2.11.2026.
- Town of Radebeul, bylaw for the "Zentrum Radebeul-West" redevelopment area (2016, about 7.4 ha), radebeul.de, 2.11.2026.
- Federal Fiscal Court, judgment of 19.2.2013, IX R 32/12 (sections 7h/7i EStG, binding purchase contract), anwalt24.de, 2.11.2026.
- Notary Dr. Kotz on notary liability and the levy, notar-drkotz.de, 1.11.2026 (secondary source).