Baden-Wuerttemberg property tax is constitutional

Because the federal model for property tax does not provide for the possibility of proving a significantly lower market value, the Federal Fiscal Court has granted the suspension of enforcement of the property tax assessment notice in two cases.

In two test cases, the Baden-Württemberg Fiscal Court ruled that the state model for property tax B, i.e. the property tax for land that is not used for agriculture and forestry, is constitutional. According to the court, it is compatible with the principle of equality that the state, contrary to the previous regulation and the various other new regulations, levies property tax exclusively on the land without taking into account buildings on the property. In doing so, the court refers to the legislator's broad scope when selecting the object of taxation.

The value corridor of plus or minus 30 % of the actual market value aimed for with the flat-rate valuation of the standard land value is also constitutionally acceptable due to the otherwise disproportionate effort involved in the individual valuation of each property, especially as the owner can prove a deviating market value by means of an expert opinion. The court also considers the fact that the specific amount of the new property tax has not yet been determined until the municipalities have set their assessment rates for 2025 to be acceptable because the public interest in the reform of the property tax ordered by the Federal Constitutional Court outweighs the interest of property owners in the predictability of the property tax burden during the transition period.

An appeal can be lodged against the rulings of the tax court, which means that the Federal Fiscal Court would next have to decide on the state model in Baden-Württemberg. Even if it does not necessarily make property owners in the state happy, these rulings mean that the likelihood of the new property tax model being overturned has shrunk considerably.