property
Study: Property tax model unconstitutional
Semi-detached houses in a new housing estate. In many federal states, there is a risk of a wave of lawsuits against the tax authorities because of the new calculation of the property tax. photo
© Henning Kaiser/dpa
Property tax post from the tax office – a nasty surprise for some. Many properties were valued significantly higher. Associations recommend filing an objection when in doubt – and want to sue themselves.
In many federal states, the tax authorities are threatened with a wave of lawsuits because of the new calculation of the property tax. The constitutional lawyer Gregor Kirchhoff considers the federal law applied in eleven countries to be unconstitutional. This is the conclusion of the lawyer in a study commissioned by the taxpayers’ association and the owners’ association Haus und Grund, which was presented on Monday in Berlin.
The associations now want to go to court with model lawsuits in five federal states – in Berlin, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate and Saxony. They recommend that owners file an objection to the assessments of the value of their real estate, some of which have already been sent out by the tax authorities. In most federal states, these notices form the basis for future property tax calculations. “It’s obvious that the new property tax doesn’t work that way and will ultimately lead to significant additional burdens,” said the President of the Taxpayers’ Association, Reiner Holznagel.
From 2025, the property tax is to be recalculated. Not all states have to apply the same criteria: While most use the federal model that has been criticized, Bavaria, Baden-Württemberg, Hamburg, Hesse and Lower Saxony have developed their own calculation methods.
Ground values not comparable?
Most recently, thousands of property owners had to submit a declaration with data on their property and house to their tax offices because of the reform. Because the value of almost 36 million properties has to be recalculated.
Kirchhoff criticized that the standard land values determined as a result were not comparable. For example, the sought-after residential area Wannsee in Berlin received a lower reference value than the less attractive location Neukölln. In addition, individual circumstances such as monument protection requirements, construction defects, contaminated sites and others are not taken into account when evaluating the property. The lawyer considers the property tax calculation via the standard land value to be problematic in general – compared to models with only area and building type.
Around 15 to 20 million tax assessments have been issued since the documents were submitted. Many owners experienced a nasty surprise: the standard land values are often significantly higher than before. “We have never had so many concerned taxpayers,” said Holznagel. The president of Haus und Grund, Kai Warnecke, reported that there was an “insane influx of members” because of this. It is very irritating for the owners that there is no information on what property tax they will actually have to pay from 2025.
That will remain open for a while. Because the amount of the property tax depends crucially on the so-called assessment rates of the municipalities, which are only determined at short notice. But then it is often too late to defend oneself against the decisions, the associations warn. They appeal to the eleven federal states to break away from the federal calculation model and to develop their own methods that they believe are less vulnerable.