Settlement amount - early redemption

What is a compensation amount and how is it calculated?

The compensation amount represents a share of the costs of the redevelopment measure for the properties located in a redevelopment area. It corresponds to the increase in the land value of the properties caused by the construction and redevelopment measures initiated as a result of the redevelopment measure.

The assessment of the compensation amount is based on an exact valuation by the "Expert Committee for Property Values for the Area of the City of Jena", which is located in the Free State of Thuringia. The amount determined depends on the extent to which the individual redevelopment measures in the neighbourhood and in the redevelopment area have influenced the value of the respective property.

When is a compensation amount due?

As a rule, the compensation amount required by law is not levied until all planned measures in the redevelopment area have been completed by means of a formal notice. However, the legislator also allows for the possibility of an early formal determination (§ 154 para. 3 sentence 3 BauGB) or an early voluntary redemption (§ 154 para. 3 sentence 2 BauGB) of the compensation amount.

In the case of a redemption, the increase in land value due to redevelopment is determined for the property in question until the anticipated completion of the entire redevelopment measure. The redemption of the compensation amount requires a written agreement with the city of Jena, which can be applied for informally.

Advantages of a voluntary early redemption of the compensation amount

An early redemption of the compensation amount by the property owner could possibly be financially advantageous. A new standard land value map is drawn up every 2 years by the expert committee. Upon presentation of the new standard land value map, the newly determined standard land value is used to calculate the compensation amount under redevelopment law.

Once the compensation amount has been paid, the obligation to obtain approval under redevelopment law for property purchase contracts also ceases to apply. In the event of a possible sale of the property, the owner is then no longer bound by the price fixing under redevelopment law.

Depending on the individual case, the redevelopment of the property can also be declared complete after the redemption and the property can thus be formally released from the redevelopment prematurely.

This would mean that there would no longer be any restrictions under redevelopment law. According to the requirements of the legislator, compensatory amounts redeemed prematurely must be reallocated to the respective redevelopment measure. This means that these funds would directly benefit the further upgrading of the area and thus also the property owners in the redevelopment area.

With the redemption, the obligation of a property owner to pay a compensation amount is also fulfilled for the future. Both the owner's right to reclaim and the City of Jena's right to demand additional payment are thus excluded.

In certain cases, the compensation amount can be claimed for tax purposes as acquisition or production costs or as income-related expenses/business expenses.

• Informal application to the Urban Development Department, Urban Redevelopment Team

• § 153 BauGB
• § 154 BauGB