In Saxony, almost every third owner has lodged an objection against the notices in connection with the property tax.
(Photo: Moment/Getty Images)
Frankfurt The recalculation of the property tax is causing considerable unrest among Germany’s property owners. They are resisting the new method and appealing their tax assessments en masse.
Of all the federal states, Saxony has the highest objection rate of 29 percent. In Berlin, Mecklenburg-Western Pomerania and Schleswig-Holstein, around one in five owners is fighting back. The national average is around ten percent, which corresponds to almost three million objections. This was the result of a survey initiated by the property tax portal LAMA in the finance ministries of the 16 federal states.
Kai Warnecke, President of the Haus & Grund owners’ association, says the figures show above all that the property tax reform was “terribly poorly prepared and communicated”. “The owners fear that they will have to pay significantly more property tax after the reform and want to be armed with an objection.”
The previous real estate tax was based on a valuation of the real estate in the years 1964 (West) and 1935 (East). In 2019, the Federal Constitutional Court overturned this method. The federal government then agreed on a new calculation (federal model). The federal states of Baden-Württemberg, Bavaria, Hamburg, Hesse and Lower Saxony developed their own models.
The 36 million owners in Germany were then asked to report the data required for the recalculation to the tax authorities in the form of a property tax return.
Based on the submitted data, the so-called property tax value and property tax assessment notices are currently being issued. The values shown there are generally significantly higher than the values according to the old method, especially in the east, where the values from 1935 previously formed the basis.
Only one month objection period
Chancellor Olaf Scholz, then Minister of Finance, promised in 2019 that the property tax reform should be revenue-neutral, i.e. the municipalities would then lower their assessment rates to such an extent that no higher property tax would be levied overall.
The property tax assessment notices are currently being forwarded to the municipalities, and they will use them to calculate the new assessment rates in the course of 2024. The owners will only find out how high the real estate tax to be paid from 2025 will be in the real estate tax assessment, which will be sent out at the end of 2024.
>> Read here: Due to overload – tax offices put objections on the back burner
They can then no longer defend themselves against this. If you have concerns, you must lodge an objection within one month against the property tax value and property tax measurement notices that have now been issued.
For Daniela Karbe-Gessler, head of the tax department at the Association of Taxpayers (BdSt), the high number of objections is “not surprising.” The BdSt had already expressed constitutional doubts during the legislative process and, like the Haus & Grund owners’ association, advised against the objection notices.
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The doubts have since been confirmed by a report by the Munich tax law professor Gregor Kirchhof. First lawsuits are pending. But only those who actually lodge an objection can also benefit from a positive verdict.
>> Read here: Legal opinion considers new property tax model to be unconstitutional
Florian Köbler, head of the tax union, on the other hand, had already pointed out weeks ago that one could wait and see in view of the flood of objections. Because if the constitutional court were to overturn a model again, a change would apply to all owners, according to Köbler.
Karbe-Gessler says: “The objections could have been avoided if the tax authorities had decided from the start to provisionally issue the assessments of the property tax value until constitutional clarification.”
More: Property tax – when it is worth objecting to the decision.