Real Property Tax Act (GrStG)
§ 19 Reporting Obligation
(1) Any change in the use or in the ownership of a taxable item that is wholly or partially exempt from real property tax must be reported by the person who, according to § 10, is considered the taxpayer. The report must be submitted to the tax office responsible for determining the tax assessment amount within three months after the change occurs.
(2) The loss of the prerequisite for the reduced tax assessment rate according to § 15 paragraph 4 must be reported by the person who, according to § 10, is considered the taxpayer. The report must be submitted to the tax office responsible for determining the tax assessment amount within three months after the loss of the prerequisite.
This explicitly refers to tax-exempt cases. It has nothing to do with the present case.
No, actually the city/municipality is obliged to report to the tax office. So if the buddy properly notified that he is building, he is off the hook in this respect.