Settlement Amount - Early Redemption

What is a compensation payment, and how is it calculated?

The compensation amount represents the share of the costs of the redevelopment project borne by the properties located within a redevelopment area. It corresponds to the increase in the land value of the properties resulting from the construction and regulatory measures undertaken as part of the redevelopment project.

The values underlying the compensation amount are determined by an expert appraisal in consultation with the Appraisal Committee for Property Values for the Saale-Holzland District, the Saale-Orla District, and the independent city of Jena—whose office is located at the Thuringian State Office for Land Management and Geoinformation in Pößneck—following a precise valuation.  The amount determined depends on the extent to which the individual redevelopment measures in the neighborhood and within the redevelopment area have affected the value of the respective property.

When is a compensation payment due?

As a rule, the legally required assessment of the compensation amount is made only after all planned measures in the redevelopment area have been completed, by means of a formal notice. However, the law also allows for the possibility of an early formal determination (Section 154(3), sentence 3 of the German Building Code (BauGB)) or an early voluntary settlement (Section 154(3), sentence 2 of the German Building Code (BauGB)) of the compensation amount.

In the case of a settlement, the increase in land value attributable to the redevelopment is determined for the property in question up to the expected completion of the entire redevelopment project. The settlement of the compensation amount requires a written agreement with the City of Jena. To express your interest in such an agreement, please contact the designated representatives listed below.

Advantages of a Voluntary Early Redemption of the Compensation Amount

An early settlement of the compensation amount by the property owner could, under certain circumstances, be financially advantageous . The Appraisal Committee prepares a new standard land value map every two years. 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.

To assist affected property owners in paying the compensation amount and to provide an additional incentive for its early settlement, discounts on the expected compensation amount may be granted depending on the duration of the redevelopment project in the respective area.

The corresponding city council resolution provides for the following discounts:

"Sophienstraße" Redevelopment Area (Implementation deadline: December 31, 2026)

Redevelopment Area “Unteraue Industrial Park” (Implementation Deadline: December 31, 2026)

Redevelopment Area "Model Urban Renewal Project" (Old Town) excluding the "Northern Downtown" subarea (implementation deadline: Dec. 31, 2031)

"Karl-Liebknecht-Straße" Redevelopment Area (Implementation deadline: December 31, 2031)

"Western Downtown" Redevelopment Area (Implementation deadline: December 31, 2032)

Following the early repayment of the compensation amount, approval under redevelopment law is typically granted for real estate purchase agreements. In the event of a potential sale of the property, the owner is then no longer bound by the pricing requirements under redevelopment law.

A buyout agreement provides mutual and definitive legal certainty for both parties. With the buyout, the property owner’s obligation to pay a compensation amount is fulfilled for the future as well. Compensation amounts can no longer be levied by official notice thereafter. Both additional payments and claims for refunds are excluded. Properties can then be sold “free of compensation amounts.”

This also significantly reduces the administrative burden.

The payment terms (installments, due dates) can be agreed upon flexibly. The compensation amount set by official notice following the repeal of the redevelopment ordinance, on the other hand, becomes due one month after the notice is issued—even in the event of an appeal.

Depending on the individual case, once the redemption has been completed, the redevelopment for the property may also be declared fully concluded, and the property may thus be formally released from the redevelopment program ahead of schedule. 

This would mean that no restrictions under redevelopment law would remain in effect. According to legislative requirements, compensation amounts paid in advance must be reallocated to the respective redevelopment measure. This would ensure that these funds directly benefit the further revitalization of the area and, consequently, the property owners within the redevelopment area.

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

• Informal request to the Urban Development Department, Urban Renewal Team

• § 153 of the BauGB
• § 154 of the BauGB