“Objection tsunami” at tax offices – property tax reform causes uncertainty

Published On: 22.May.2023Categories: Legal3 min read
Avatar photo
Christina Schröder writes about legal topics for the Love & Law Blog at Recht 24/7.

The property tax reform in Germany has led to a veritable “objection tsunami” at the tax offices. Owners and tenants of around 36 million properties are concerned about the expected drastic increase in property tax. In view of the lack of transparency and regional differences in the calculation, more than 1.3 million people have already lodged appeals against the new assessments.

The shock of the new calculation – disagreement and lack of transparency

In Berlin, for example, an owner was upgraded from an annual property tax payment of about 220 euros to 901 euros – four times as much. However, there is great uncertainty about whether this drastic increase is really justified. Taxpayers complain about the lack of transparency and the difficulty of determining the tax burden themselves on the basis of the available documentation.

A “tsunami of objections” overtakes the offices – workload increases

The German Tax Union speaks of a “tsunami of objections” that is currently overwhelming the tax offices. Every day, they receive an average of 50 to 70 objections, resulting in an enormous workload. Given this flood of appeals, there is no end in sight. Many of these appeals could ultimately end up before the Constitutional Court, which initiated the property tax reform decades ago.

Municipalities in financial straits – higher burdens looming

The squeeze on many municipalities could lead to an additional burden on taxpayers. Although the reform was supposed to be revenue-neutral, it is becoming apparent that many municipalities will urgently need the higher tax revenues. This will lead to a further increase in property taxes and further worsen the financial situation of those affected.

Inequality of the calculation bases – problems of regional differences

The inequality of the calculation bases between the federal states leads to further frustration and incomprehension. Seven states have their own tax models, while nine states use the so-called federal model. For example, an important factor in calculating property tax under the federal model is the year in which the property was built. These differences cause friction and create further inequities.

Gardens and undeveloped land – equally high taxation

Another point of criticism is the equally high taxation of gardens and undeveloped land compared to developed land. This leads to incomprehension, especially if the use of the land is for nature conservation, for example. The fact that theoretical rental income is also calculated for owner-occupied real estate increases the resentment of those affected. Often, these rental incomes differ significantly from the actual agreements, which leads to further injustice.

Concern about financial burden and loss of real estate

In Baden-Württemberg in particular, the so-called “land value model” is causing resentment. Here, only the area is taken into account with the new standard land values, while the value of the property itself plays no role. As a result, large apartment buildings and villas are subject to the same high property taxes as smaller houses. If municipalities do not lower the assessment rate, this can lead to enormous financial burdens. Many citizens worry that they will no longer be able to bear the financial burden or will be forced to abandon their properties.

Appeal as a last resort

Against this background, the Taxpayers’ Association recommends filing an appeal against the new property tax assessment notices as a precautionary measure. However, only one month remains for it after the notice was issued. Experts like the federal chairman of the German tax union, Floian Köbler advise however clearly to an objection.

Conclusion: File an objection

In view of the financial burden and the possible real estate losses, it is advisable to file an objection against the new real estate tax assessments. It is to be hoped that those responsible will recognize the current challenges and take measures to ensure a fairer and more transparent property tax.

For a fixed fee 189,00 EUR gross