How you can challenge Germany's controversial property tax on your home
Following a
major reform to Germany's property tax rules
as of the beginning of this year, millions of land- and homeowners are challenging the amount of property tax they owe.
Why were the property tax rules changed?
Germany's old rules around property tax (
Grundsteuer
) had been ruled unconstitutional in 2018. The Federal Ministry of Finance explains
on its website
that is was because the old tax code treated similar properties differently (depending on the region) and therefore violated the principle of equal treatment, which is protected by Basic Law.
The primary change to the rules that impacts homeowners is that the valuation of properties has been updated. Until the end of 2024 property valuations were based on decades old standard values – these were established in 1964 for properties in former West German states and as far back as 1935 in former East German states.
Property valuations have now been reassessed, as of January 1st, 2022.
Additionally, a law was added that allows cities to increase the assessment rate on undeveloped plots of land. This was intended to disincentivise speculation on land that might otherwise be developed.
In simple terms, the rule reform has seen properties revalued, and for many homeowners in Germany it brought a significant increase in the property tax they owe going forward.
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Widespread objections across Germany
But many homeowners do not agree with the property tax increases, and some argue that the new assessments are unfair.
Since new valuation assessments were sent out, millions of property owners have appealed.
According to a
report
by
Focus Online,
1.4 million objections were received by the tax offices in Baden-Württemberg – meaning that nearly 30 percent of homeowners in the southwestern state feel their assessment was incorrect or unjustified.
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The situation is similar in other German states as well.
SWR
reported 1.5 million objections in North Rhine-Westphalia, 1.3 million in Bavaria and 440,000 in Rhineland-Palatinate.
How you can contest the property tax
Generally, to challenge your property tax obligations in Germany you need to contest the property tax assessment, which is sent in the mail by your local tax office. This needs to be done, in writing or with a visit to the tax office, and usually within one month from receipt of the assessment.
After you've filed the objection, you have two months to submit a detailed justification, including any evidence you have to support your claim. If the objection is rejected, you can then file a lawsuit with the Fiscal Court within one month of receiving the rejection notice.
Regarding the new property tax rules, the homeowners' association Haus & Grund has taken up the issue and is bringing a number of legal challenges against the new property tax.
READ ALSO:
What Germany's tax authorities need to know if you rent out your home
In a
post
on the association's website it lists several reference numbers for ongoing cases, and suggests that owners can refer to the ongoing lawsuits and file their own objections.
The cases, which were filed with courts in Berlin-Brandenburg, Rhineland-Palatinate, Cologne and Düsseldorf, argue that the new property tax rules violate the principle of equality of the Basic Law.
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The cases will force German courts to clarify whether the new property tax rules are compatible with the law. They are expected to go all the way to the Federal Constitutional Court.
It will likely be several years before the cases are decided, but if you want to seek compensation for paying excessive property tax from now on, you should file an objection now.
If you do intend to bring a lawsuit forward, you'd be advised to seek legal counsel from a homeowners' association like Haus & Grund or similar or a lawyer.
Note that this article is written for informational purposes only and should not be interpreted as legal advice.
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