Suspension of enforcement for property tax assessment notice

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.

Since the property tax reform, the new regulations under both the federal model and the state models have been classified by some experts as partially unconstitutional. Various test cases are now pending. In two cases, the Federal Fiscal Court has now granted the suspension of enforcement of the property tax assessment based on the federal model. However, the Federal Fiscal Court does not state in the reasons for its decision whether it actually considers the federal model to be unconstitutional, as this will only be decided in the main proceedings.

The reason for the suspension of enforcement was rather that the federal model does not provide for proof of a lower value of the property, but the two plaintiffs had cogently demonstrated that the property tax value for their properties under the federal model was significantly too high. The court saw this as a violation of the ban on excessive taxation. However, the Federal Fiscal Court had already ruled in the case of various other standardized valuation regulations that proof of a lower market value is permissible in order to avoid a breach of the prohibition of excessive taxation under the Basic Law if the legislator has not expressly regulated such proof. Here too, the judges have brought this evidence into play as an alternative.

Ultimately, the two decisions have two consequences: On the one hand, other landowners who consider their property to be significantly overvalued by the federal model can now also rely on the reasoning of the Federal Fiscal Court. On the other hand, the rulings have no direct impact for those who wish to challenge the new property tax regulations as fundamentally unconstitutional, as the Federal Fiscal Court has not commented on their fundamental constitutionality.