The ball is in the Federal Fiscal Court's court: Will owner complaints overturn the new property tax?
2025 sees the start of the new property tax - and with it a wave of appeals. Numerous owners have recognised errors in their assessment notices or are questioning the valuation logic. Now it is the turn of the Federal Fiscal Court (BFH): it will clarify in several proceedings how strictly the tax authorities are allowed to calculate and where the limits of the law lie. But will the BFH overturn the property tax as a whole? Realistically, the BFH can enforce corrections to the application and decide questions of doubt. A complete repeal would be the task of the Federal Constitutional Court (BVerfG). This could nevertheless bring tangible relief for property owners.
What does the BFH review - and what doesn't?
The BFH assesses whether the tax authorities apply the legal requirements correctly and whether individual provisions can be interpreted in accordance with the constitution. If it considers regulations to be unconstitutional, it can suspend the proceedings and refer the issue to the Federal Constitutional Court. Until then, however, the notices remain effective.
Important: Different models apply depending on the federal state. While the Federal model (e.g. in NRW, Berlin, Brandenburg, Rhineland-Palatinate, Schleswig-Holstein) is based more strongly on standard land values and building data, states such as Bavaria (surface model), Baden-Württemberg (land value model) or Hamburg/Hesse/Lower Saxony (area-location variants) have a different focus. Points of dispute therefore differ - the BFH will set guidelines for practice depending on the facts of the case.
Quick check (10 minutes): How to expose typical mistakes
- Are the property and living space details correct? Storage and usable areas are sometimes assessed differently according to the WoFlV.
- Is the Standard land value for the correct zone and the correct reference date (land value portal/appraisal committee)?
- Building category correct? Single-family house vs. multi-family house influences measurement figures.
- Are discounts/surcharges taken into account (monument protection, heritable building rights, special location factors per country model)?
- Plausibility check: Does the value deviate unusually strongly from the previous year/environment? Then collect documents and consider lodging an objection.
Possible consequences of a BFH judgement
The BFH could instruct the administration to define valuation parameters more narrowly, to take exceptions into account more generously or to scrutinise the derivation of standard land values more strictly. Result: lower property tax values and therefore lower property tax payments (if the assessment rate remains unchanged). Local authorities could respond to revenue shortfalls with adjusted assessment rates - but this would affect everyone, not just the successful claimants.
- Scenario 1: Correction of individual parameters (e.g. location factor, building class) - selective relief.
- Scenario 2: Stricter obligations to provide evidence of the tax offices - better chances for appeals with supporting documents.
- Scenario 3: Submission to the BVerfG - Prolonged state of suspension, proceedings are suspended, provisional determinations remain in place.
Practice: How owners are now proceeding strategically
Anyone who has already received notices (property tax value and property tax assessment notices) generally has one month to lodge an objection. This should be well-founded and include supporting documents. In addition, it is advisable to apply for a suspension of the proceedings with reference to pending test cases - this will keep your case „docked“ until a supreme court ruling is issued.
- Bundle documents: Land register extract, cadastral map, calculation of living space (WoFlV), building documents, notification of listed building status, information on standard land value.
- Create plausibility calculation: Area x reference value, simple location check, comparison with neighbouring zones.
- Appeal to the tax office within the deadline (against the valuation and measurement decision), apply for suspension of the proceedings.
- Municipal property tax assessment: Check separately; if necessary, give reasons for objection or application for suspension of enforcement.
- make payments: As a rule, pay on time despite an objection in order to avoid late payment penalties (exception: authorised suspension).
Simplified calculation example (not legally binding)
Plot 500 m² in medium location. Deposited standard land value: 800 €/m², after correction plausible 650 €/m².
Value approach A: 500 m² x 800 € = 400,000 €
Value approach B: 500 m² x 650 € = 325,000 €
Difference in property tax value: €75,000. Depending on the measurement figure and assessment rate, this can amount to several hundred euros per year. Conclusion: Even „small“ corrections to the reference value have a disproportionate effect on the tax.
Federal model vs. state models: Where are the areas of attack?
The federal model focuses on data quality (standard land values, building characteristics). Sources of error here are often the zone or the reference date. In Baden-Württemberg (land value model), the standard land value plays an even greater role - inaccuracies have a particularly strong impact. In Bavaria and in area-location models (e.g. Hamburg, Hesse, Lower Saxony), usable/residential areas and location factors take centre stage; here, correct area calculations according to WoFlV and the location supplement are decisive.
Practical comparison: While a land value that is incorrectly too high causes the greatest burden in the federal model, a living space that is determined to be 10 % too high can have the same effect in area models. Owners should therefore check on a model-specific basis - generalised tips are only of limited help.
Common errors - and solutions
- Wrong living space: Balconies, sloping ceilings, storage rooms - not everything counts in full. Solution: Recalculate, document with plans and photos.
- Unusual building type: One/two-family house recognised instead of multi-family house? Solution: Submit building documents and utilisation.
- Land value confusion: Incorrect zone or conversion factor. Solution: Information from the expert committee, enclose printout.
- Forgotten difficulties: Monument protection, heritable building rights, noise emissions. Solution: Attach notices/expertises, write an explanation.
Estate agent tip: Anyone wishing to let or sell benefits twice over from clean property tax: lower running costs increase returns and market acceptance. We check your documents with a view to selling, letting and financing and identify optimisation potential - quickly, discreetly and soundly.
Conclusion: Property owner lawsuits will probably not overturn the property tax „overnight“, but they can force leading decisions that provide noticeable relief. Those who check notices in a structured manner, observe deadlines and document receipts properly will create a strong starting position - whether for appeals, negotiations with the local authority or the next financing.
Do you need a second opinion on your property tax documents or are you planning to sell/let? We combine market knowledge with practical tax expertise and tell you clearly where you stand - and what is worth adding.
