New ruling on property tax on June 11, 2024
On June 11, 2024, the Stuttgart Fiscal Court dismissed complaints about the new property tax. The ruling states that only the value of the land counts for the new property tax – buildings on it do not play a role. Property owners fear massive tax increases and have therefore filed a lawsuit.
Lawsuits dismissed – the battle continues
The judges sided with the tax authorities. However, the plaintiffs from Stuttgart and Karlsruhe, supported by the Taxpayers’ Association and Haus & Grund, announced that they would go to the next instance. It is expected that the dispute will ultimately end up before the Federal Constitutional Court. This is because doubts about the constitutionality of the new property tax are growing ever louder.
The land value model and its problems
The land value model in Baden-Württemberg only calculates the property tax based on the plot area and the new standard land values. This can result in large apartment buildings and villas paying the same tax as small owner-occupied homes. This could be particularly expensive for owners of small houses with gardens if the local authorities do not reduce the assessment rate.
Court considers model to be constitutional
The court ruled that it was permissible to only encumber the land and not the buildings on it. The state law was compatible with the Basic Law. The plaintiffs must bear the costs of the proceedings, but can appeal at a higher instance.
Example from Stuttgart
The plaintiffs from Stuttgart fear drastic cost increases. They currently pay 200 euros in property tax per year; from 2025, this could rise to 2,850 euros – fourteen times as much. As pensioners, they could hardly bear this burden. Their renovated house from 1938 is their retirement provision, which is now threatened by the new property tax.
Conclusion
The new property tax is causing considerable legal uncertainty. Unlike today’s ruling from Stuttgart, in November 2023 the Rhineland-Palatinate Fiscal Court expressed considerable constitutional doubts about the new property tax. We therefore advise you to protect yourself! Make sure you lodge an objection to your property tax assessment notice from the tax office. You can do this easily with our sample objection to property tax 2024. This will benefit you if the property tax is declared unconstitutional in the last instance.
