Inaccurate property tax evaluation: homeowners have the right to voice their concerns.
In 2018, the Federal Constitutional Court urged for the re-evaluation of property taxes. The outdated property values used previously didn't reflect the actual worth of the properties, leading to an unfair distribution of the tax load.
To recalculate the tax, new property values were established. These values were multiplied by a specific tax rate, resulting in the total property tax sum. Afterwards, each municipality would apply their respective surcharge, determining the final tax amount for the property owners. Landlords worried about a high property tax need to act against the determined values before they're finalized due to legal deadlines.
This change affects over 36 million properties nationwide. To confirm the revaluation, various flat-rate assessments and groupings were required. Additionally, there are different methods for valuing properties. The majority of states use the federal model.
Two applicants from Rhineland-Palatinate initially received a temporary halt on the use of the determined property values through a preliminary injunction at the Rhineland-Palatinate Finance Court. The court concluded that the valuation regulations must be interpreted "in a way that taxpayers can show a lower property value lower than the typified property tax value".
The Federal Constitutional Court concurred with this view. Property owners must have the right to "prove a lower common value in the event of a violation of the principle of proportionality." This is true even if the legislator hasn't explicitly included this in the law. In detail, the principle of proportionality is violated when the determined value exceeds the actual value by more than 40%. In these cases, it's possible that this limit has been surpassed, according to the court. Therefore, the applicants are allowed to provide such statements.
The Federal Constitutional Court clarified that "a final decision on the constitutionality of the new property tax law is not tied to this." This will only be determined in the main proceedings and ultimately through the Federal Constitutional Court. The Federation of Taxpayers and the Owners' Association House & Ground confirmed their "serious concerns" about the new property tax in Berlin.
Read also:
- The recalculation of property taxes in Munich, following the Federal Constitutional Court's ruling in 2018, has caused concern among landlords due to potential high property tax sums.
- The Federal Fiscal Court played a role in the property tax calculation process, as each municipality applies their respective surcharge to the total property tax amount.
- In an extreme case, a property owner from Rhineland-Palatinate was able to halt the use of the determined property values due to a preliminary injunction, as the court ruled that the valuation regulations should allow for a lower property value to be proven.
- The change in property tax evaluation affects over 36 million properties in Germany, with most states using the federal model for property value assessments.
- Despite the concerns voiced by the Federation of Taxpayers and the Owners' Association House & Ground, a final decision on the constitutionality of the new property tax law is still pending at the Federal Constitutional Court.
