How a property is valued

What the market value is

The German Federal Building Code (Baugesetzbuch) defines the market value (Verkehrswert) as the price that could be obtained on the reference date ‘in the ordinary course of business, taking into account the legal circumstances and actual characteristics, the other features and the location’, disregarding unusual or personal circumstances (§ 194 BauGB).

How the calculation works is governed by the Real Estate Valuation Ordinance (Immobilienwertermittlungsverordnung) of 2021. The sales comparison, income and cost approaches are permitted, including several in combination. Which one fits depends on the type of property, customary practice in the market and the data available; the choice must be justified (§ 6 ImmoWertV).

Sales comparison approach

The comparison value (Vergleichswert) is derived from a sufficient number of purchase prices for similar properties sold close to the reference date (§§ 24, 25 ImmoWertV, Real Estate Valuation Ordinance). Where there are enough sales, this is the most direct route, in practice above all for individually owned flats (Eigentumswohnungen).

Berlin has plenty of data for this: in 2025 the valuation committee (Gutachterausschuss) counted 15,368 sales of individually owned flats (Eigentumswohnungen), and average prices rose on the previous year by 4 per cent for existing flats and by 10 per cent for new builds. The committee also publishes comparison factors (Vergleichsfaktoren) for individually owned flats (average for 2024: 5,234 euros per m² from 9,779 sales), but these are expressly intended for tax purposes and do not replace a determination of the market value.

Income approach

The income value (Ertragswert) depends on what a property earns in the long term (§ 27 ImmoWertV, Real Estate Valuation Ordinance). The gross income (Rohertrag), i.e. the annual rents customary in the market, is reduced by the operating costs (Bewirtschaftungskosten): management, maintenance, risk of rent loss and running costs that cannot be passed on to tenants (§§ 31, 32 ImmoWertV). The net income determined in this way is reduced by the return on the land value, the remainder is capitalised over the remaining useful life, and the land value is added back (§ 28 ImmoWertV).

The key factor is the property yield rate (Liegenschaftszinssatz), the rate at which properties of this type earn a market-standard return on average (§ 21 para. 2 ImmoWertV). The Berlin valuation committee (Gutachterausschuss) derived it from sales in the years 2022 to 2024 (property yield rates 2025, reference date 31/12/2024):

The range runs from 2.6 to 4.9 per cent, plus upward and downward adjustments, such as minus 0.6 percentage points in the former borough of Mitte and minus 0.3 in Charlottenburg. The values apply only to properties with at least four rental units, and expressly not to one- to three-family houses or to individually owned flats (Eigentumswohnungen). On average, buyers paid 26.6 times the annual net cold rent; more on this in Price-to-rent multiplier Berlin.

Worked example: income value

All input values are assumptions; the operating costs follow the model assumptions of the valuation committee (Gutachterausschuss) for 2024. Rental apartment building in the City area group, period building (Altbau), normal condition, 10 flats totalling 800 m², plot of 500 m².

That is around €2,470 per m² of living space, or 20.6 times the gross income. The page Price-to-rent multiplier Berlin shows how such multipliers vary by district. A valuer then also checks the market adjustment and special features such as a maintenance backlog.

Cost approach

The cost value (Sachwert) is calculated from what the buildings would cost to build new, less age-related depreciation, plus the land value (§§ 35, 36 ImmoWertV, Real Estate Valuation Ordinance). Age-related depreciation is linear: its factor is the remaining useful life divided by the total useful life (§ 38 ImmoWertV). Because buyers do not simply pay the construction costs, the provisional cost value is adjusted to the market using a market adjustment factor, the Sachwertfaktor (§§ 21 para. 3, 39 ImmoWertV). As a rule, the land value is derived from the standard land value (Bodenrichtwert; § 40 ImmoWertV).

For one- and two-family houses in Berlin, the market adjustment factor (Sachwertfaktor) averaged 1.06 (2,952 sales analysed, 2022 to 2024). It falls as the cost value rises: in Treptow, Lichtenberg, Charlottenburg, Spandau, Wilmersdorf, Zehlendorf, Steglitz and Pankow it is 1.01 at a provisional cost value of 300,000 euros, 0.90 at 700,000 euros and 0.79 at 1.1 million euros. The table does not apply to villas and country houses.

When you need an expert report

The valuation committee (Gutachterausschuss) prepares market value reports (Verkehrswertgutachten) on request, for example from the owner or a court; they are binding only if this has been stipulated or agreed (§ 193 BauGB, German Federal Building Code). Valuation experts also do this work, for example those publicly appointed under § 36 of the German Trade Regulation Act (Gewerbeordnung).

An expert report is required, for example, if you want to prove a lower value to the tax office after an inheritance or gift: for this, the law generally names a report by the valuation committee (Gutachterausschuss) or by an appointed or certified expert, or alternatively a purchase price achieved within one year (§ 198 BewG, German Valuation Act). For a sale, a well-founded market assessment is usually enough.

What this means for your sale

With any valuation, ask which method was used and with which data; without this information a price can hardly be checked. For a rental apartment building, even half a percentage point of property yield rate (Liegenschaftszins) shifts the value considerably; for a single-family house, the market adjustment factor does.

How we assess properties is described on the page Property valuation in Berlin; current multipliers by district can be found in the market report on price-to-rent multipliers.

Sources

• § 194 Baugesetzbuch (BauGB, German Federal Building Code), market value
• § 193 BauGB, expert reports by the valuation committee
• § 6 Immobilienwertermittlungsverordnung (ImmoWertV, Real Estate Valuation Ordinance), choice of method
• §§ 24 and 25 ImmoWertV, sales comparison approach
• §§ 27, 28, 31, 32 ImmoWertV, income approach, net income, operating costs
• § 21 ImmoWertV, property yield rates and market adjustment factors
• § 34 ImmoWertV (official PDF), capitalisation factor
• §§ 35, 36, 38, 39 ImmoWertV, cost approach, age-related depreciation
• § 40 ImmoWertV, land value
• § 198 Bewertungsgesetz (BewG, German Valuation Act), proof of a lower fair market value
• § 36 Gewerbeordnung (German Trade Regulation Act), publicly appointed experts
• Berlin valuation committee (Gutachterausschuss): property yield rates 2025, reference date 31/12/2024, tables 6 to 12, model assumptions
• Berlin valuation committee (Gutachterausschuss): market adjustment factors (Sachwertfaktoren) 2025, reference date 31/12/2024, tables 2 to 5
• Berlin valuation committee (Gutachterausschuss): comparison factors for individually owned flats (Wohnungseigentum) for tax purposes, reference date 31/12/2024
• Berlin valuation committee (Gutachterausschuss): preliminary property market report 2025, published 21/04/2026

All sources accessed on 4 October 2026.