Contested Legality of Fresh Land Taxation
Real Madrid News Today: Tax Adjustments Possible, but Not Mandatory
In recent developments, the Federal Fiscal Court has ruled that tax authorities can revise real estate tax assessments if the deviation between the measured joint value and the assessed tax value exceeds 40%. This decision opens up the possibility for property owners to request a correction in their tax assessments.
Viktoria Luücke, a realtor and tax consultant, has explained the important details about the new tax notices. According to the new rules, property owners whose tax assessments have not yet been finalized can request the tax office to issue new notices based on a lower common value proven by an expert opinion.
The correction option is based on paragraph 222, paragraph 1 of the Assessment Act, which applies if the proven common value for the beginning of a calendar year differs by at least 15,000 euros from the value of the last determination date. However, it's important to note that the previously determined real estate tax value must also be at least 40 percent above the proven value for the correction to be possible.
The Federal Finance Court has not made a final statement on the question of the constitutionality of the new assessment regulations. However, they have made it clear that real estate owners do not always have to accept the new law. If substantial doubts about the legality of the notices were sufficient for the granting of the suspension of enforcement in two decided cases, it suggests that property owners have options to challenge the new regulations.
The highest financial authorities of the states have issued coordinated circulars on June 24, 2024, allowing for an adjustment of the real estate tax assessments in the case of a significantly lower proven common value. However, this adjustment is not yet legally mandated. If notices have already been issued months ago, the taxpayer can still request a correction if the one-month appeal period has expired or an appeal decision has been made.
In the case of a significantly lower proven common value, an adjustment of the real estate tax assessments is possible. The coordinated circulars of June 24, 2024, from the highest financial authorities of the states suggest that they will take the decisions of the Federal Finance Court into account. If an appeal deadline has not expired or an appeal has been filed that has not been rejected, a lower common value can be requested.
In two decided proceedings by the Federal Finance Court, an application for (partial) suspension of enforcement was made. The subject of the two decided proceedings was initially only the question of whether the suspension of enforcement was to be granted in the two cases. In both instances, the court granted the suspension of enforcement, indicating that substantial doubts about the legality of the notices were sufficient for the granting of the suspension.
This development provides some relief for property owners who believe their tax assessments are too high. While the adjustment of the real estate tax assessments is not yet legally provided for, the coordinated circulars from the highest financial authorities of the states suggest that they will take the decisions of the Federal Finance Court into account. It is advised that property owners consult with a realtor or tax consultant to better understand their options and the process for requesting a correction in their tax assessments.
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