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"Doubts about legality": Property tax reform may be unconstitutional

2023-11-28T18:50:25.340Z

Highlights: "Doubts about legality": Property tax reform may be unconstitutional. Only with property tax notice, which will probably not be sent out until 2024, will it be clear how high the property tax will be for the owners from 2025. Only in federal states of Hamburg, Hesse and Lower Saxony does he not see the problems because they have developed their own models for calculating property tax. In Saxony-Anhalt, for example, only 2000 of more than 220,1900 appeals were rejected – around <>.<>.



Status: 28.11.2023, 19:30 PM

By: Lisa Mayerhofer

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The new property tax is to apply from 2025 – but the reform is considered controversial. Many owners are unsettled. Now a fiscal court has also expressed doubts.

Berlin – The property tax reform is highly controversial. The Association of Taxpayers (BdSt) and the owners' association Haus & Grund (H&G) intend to take legal action against the actions of many tax offices in the property tax reform, and the first cases have already been filed. Now a fiscal court is also expressing doubts about the legality of the reform.

Fiscal Court: "Serious doubts about legality"

For example, the Fiscal Court of Rhineland-Palatinate has decided after urgent applications on the valuation rules of property tax that the property tax valuation notices are to be suspended due to "serious doubts about the legality" (4 V 1295/23 and 1429/23), as reported by Wirtschaftswoche.

In this context, the judges also expressed doubts about the constitutionality of the underlying valuation rules, according to the magazine. Accordingly, it is also the first time that those affected have prevailed in court with their objections to the assessment according to the so-called federal model.

The new property tax is to apply from 2025 – but the reform is considered controversial. (Symbolic photo) © serienlicht/Imago

However, the judges also said that their decision concerned only two individual cases and was issued in interim relief. The suspension of enforcement is therefore neither a revocation of the challenged notices nor a final decision on the constitutionality of the valuation rules for property tax, reports Wirtschaftswoche. However, the appeal was admitted to the Federal Fiscal Court.

New property tax: Experts advise appealing against the assessments

Background: From 2025, property tax is to be calculated on a new basis. This has been prescribed by the Constitutional Court because up to now it has been reckoned with outdated land values. The federal states can decide for themselves how they will levy the tax in the future. Most of them, however, adopt the calculation model proposed by the federal government – i.e. the federal model.

However, in order to be able to recalculate the property tax with current data, all 36 million properties nationwide must be revalued. This is done on the basis of information that owners had to submit to the respective tax offices via property tax returns. Now the tax offices determine the property tax value and then usually send out three notices: the property tax assessment notice, the property tax assessment notice and – much later – the property tax assessment.

The problem: Only with the property tax notice, which will probably not be sent out until 2024, will it be clear how high the property tax will be for the owners from 2025. However, in order to avoid possibly unjustified higher payments, the owners must already file an objection against the property tax value and the property tax assessment notice. The time limit for lodging an objection is only four weeks from the date of notification. After that, it becomes very difficult or even impossible for those affected to take action against the set values.

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According to media reports, an objection to the recalculation is often justified. In Saxony-Anhalt, for example, only 2000 of more than 220,1900 appeals were rejected – around <>,<>, on the other hand, ended with improvements for those affected, as the Halle-based Mitteldeutsche Zeitung reported a few months ago, citing the state finance ministry.

Associations want to take legal action against property tax reform

Of course, this is very unsettling for many owners, millions of whom have already lodged objections. In addition, some experts, such as constitutional law expert Gregor Kirchhof, advise a general objection. Only in the federal states of Bavaria, Hamburg, Hesse and Lower Saxony does he not see the problems, because they have developed their own models.

The constitutional law expert had also prepared a legal opinion on behalf of the Federation of Taxpayers (BdSt) and the owners' association Haus & Grund (H&G), according to which the valuation method according to the federal model is unconstitutional for several reasons. "Since this can ultimately only be determined by the Federal Constitutional Court, legal action is unavoidable," the associations explained. However, this is only open if an owner subject to property tax has lodged an objection against his property tax assessment and this has been rejected by the tax office.

With material from AFP

Source: merkur

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