BFH judgement on property tax: Why owners should take a closer look now
The new property tax will take effect nationwide from 2025. Many property owners have already received assessment notices on the property tax value - and many have lodged appeals. A recent judgement and several decisions by the Federal Fiscal Court (BFH) set important guidelines: general doubts about constitutionality are generally not sufficient for a suspension of enforcement, and errors must be proven specifically in the respective property. For owners, this means that precision counts. Those who check their data properly and document it in a comprehensible manner minimise costs and risks.
What is the BFH judgement about - and what is the key message?
The BFH has clearly signalled in its first decisions on the property tax reform: The new valuation rules (federal model) are not obviously unconstitutional. Above all, however, the BFH has strengthened the binding effect of the basic assessment notices. This means that anyone who Property tax assessment notice If you tacitly accept a property tax assessment, you can hardly make any legal adjustments later in the actual property tax assessment. The objection period of usually one month is therefore in fact the most important time to set the course.
Consequence: Owners must check the content - not argue in the abstract. Only specific objections (incorrect plot area, incorrect standard land value, incorrect building data, incorrect utilisation classification) open up opportunities for corrections.
- Generalised constitutional doubts are usually not sufficient for a suspension of enforcement.
- The assessment notice (property tax value) is the decisive lever - check and act here!
- Success is achieved by those who present object-related, provable errors.
Three quick checks on your own decision
- Is the standard land value plausible? Check the Correct guide value field and the Deadline. In densely built-up areas, just a few metres of zoning can significantly change the value. Sources: regional BORIS portals or expert committees.
- Is the area information correct? Living space according to WoFlV is not identical to gross floor area (DIN 277). Sloping ceilings, balconies, hobby rooms and cellar rooms often lead to deviations. Please confuse Living space not with Usable area.
- Building standard and year of construction correct? Core refurbishments (e.g. roof, heating, windows) can raise the standard. If this is not taken into account, the capitalised earnings value or asset value will deviate noticeably.
Property tax value €350,000 × measurement figure 0.31‰ (residential) = tax measurement amount €108.50.
With assessment rate 500%: property tax € 108.50 × 5 = 542.50 € per year.
Note: Country models and assessment rates of the municipalities may differ.
Typical mistakes - and how you can get to grips with them
In practice, properties are occasionally assigned to the more expensive guideline value range (e.g. street changed, boundary unclear).
Solution: Attach site plan and extract from the BORIS portal; mark zone boundary; in the case of mixed locations, briefly explain the applicable reference date and the valuation logic.
WoFlV errors (slopes, unheated conservatories, hobby rooms) lead to inflated yield values.
Solution: Re-measurement according to WoFlV, enclose sketch, photos and calculation. Document deviations clearly.
What you should do now
- Bundle notifications: The property tax assessment notice, property tax assessment notice and later the property tax assessment notice are linked. Check the basic assessment notice first.
- Note deadlines: Appeal within one month of notification. Note the date of the decision and receipt.
- Data prove it: Area calculation, building documents, photos, energy performance certificate, refurbishment certificates, extract from BORIS.
- focussing on justification: No „general attacks“. Instead: concrete points, concrete evidence.
- AdV realistically: Suspension of enforcement is more likely to succeed in the case of clear, significant valuation errors, not in the case of mere legal doubts.
Effects on buying, selling and financing
Property tax is also relevant for transactions beyond the assessment review. Buyers factor the annual property tax into the yield, especially in the case of apartment blocks. A property tax value that is too high can Net income and worsen the capitalisation rate. Conversely, a clean, documented valuation creates confidence - an advantage in negotiations.
As a rule, landlords can allocate property tax as operating costs (note the rental agreements). Nevertheless, unnecessarily high property tax remains a competitive disadvantage. If you prepare your documents (areas, refurbishments, special uses), you can hold discussions with banks and buyers on an equal footing.
Special features per federal state - short and sweet
In addition to the federal model, there are also state models (e.g. Bavaria, Baden-Württemberg, Hamburg). The system differs, but the principle remains the same: Check basic decision first, note the local authority's assessment rate, justify objections on a property-specific basis. In the case of mixed-use properties, it is worth looking at the correct classification (residential/non-residential), as measurement figures and valuation methods differ.
Our tip: proceed in three steps
- Check: Are the areas, utilisation, year of construction, standard, standard land value and, if applicable, rent level correct?
- Receipt: Create a compact dossier (2-4 pages) with plans, photos and calculations.
- Act: Targeted objection with specific corrections; obtain specialist support if necessary.
Conclusion: The BFH judgement sets the framework: No blanket excuses, but a proper property inspection. Those who take a structured approach now will ensure predictable costs - and improve their negotiating position on the market.
Would you like to have your documents checked quickly and professionally? We will be happy to support you - from checking the plausibility of your documents to preparing them for the tax office, bank or buyer.
