Current developments in property tax
Current developments in property tax
Lower Saxony: Suspension of opposition proceedings
Legal proceedings are pending before the Lower Saxony Fiscal Court regarding the constitutionality of the NGrStG, case no. 1 K 38/24.
In a general ruling dated 04.09.2024, the Lower Saxony State Tax Office classified this as model proceedings and determined that already pending and future appeal proceedings against notices on the property tax equivalent amounts and associated appeals against notices on the property tax assessment amount should be suspended until a decision on these proceedings becomes final.
As a result of the suspension order, the Lower Saxony tax offices will not decide on the appeals until the decision of the Lower Saxony Tax Court in the above-mentioned proceedings has become final. This includes any subsequent appeal proceedings at the Federal Fiscal Court.
However, this is expressly only a simplification of the procedure for the appellants and the tax offices. A substantive decision is not made with the suspension order.
In order to benefit from this suspension order, an objection must still be lodged against notices that are still being issued. There is no provision for the tax offices to automatically make assessments provisional.
North Rhine-Westphalia - Cologne Fiscal Court: The new property tax valuation is not objectionable
As announced by the Cologne Fiscal Court in a press release dated 27.09.2024 as part of the publication of its ruling dated 19.09.2024 (case reference: 4 K 2189/23), the new valuation law for the reassessment of property tax does not raise any serious constitutional concerns.
The proceedings concerned the valuation of a property for the new property tax in North Rhine-Westphalia; the complaint was directed against a notice on the determination of the property tax value as of 01.01.2022 according to the so-called federal model for a condominium. In addition to a significant increase in the property tax assessment amount, the owners also claimed unequal treatment, as a much lower standard land value was assessed for another apartment they owned, which was located in a supposedly better location.
The tax court firstly states that, based on the decision of the Federal Constitutional Court, the legislator has a great deal of scope for standardization and lump sums, particularly in mass proceedings such as property tax. Therefore, with regard to the necessary revaluations of properties, a procedure that is as simple and user-friendly as possible has been chosen. This requires a certain degree of standardization, especially in view of the goal of automated property valuation in the future. In addition, the use of standard land values to determine the land value has proven itself for various purposes under tax law.
With regard to the specific circumstances of the property to be valued, the comparison with the other apartement is not relevant, as the two zones in question - “commercial/industrial/special area” and “sought-after residential area” - are not adequately comparable. Secondly, neither the prohibition of excessiveness was violated nor was there a “typification outlier”. It is true that proof of a lower market value is now permitted in certain cases. However, the limits required in this respect were not reached in the present case.
Notice:
The tax court considers the proceedings to be a model case for a large number of comparable disputes currently still pending before the tax courts and tax offices and has therefore, in view of the complex legal situation and the associated uncertainties regarding property tax, allowed an appeal to the Federal Fiscal Court.