The BFH, in its rulings of 27.5.2024 (case references: II B 78/23 and II B 79/23), recently raised doubts about the constitutionality of the valuation rules under the Bundesmodell pursuant to Sections 218 ff. of the Valuation Act (Bewertungsgesetz, BewG). These rules do not provide for any possibility to recognise a market value that is considerably lower. That is why the BFH granted a suspension of enforcement within the framework of temporary legal protection.
In response to this the tax authorities of the Länder, in coordinated decrees of 24.6.2024, decided that it is possible to recognise a lower market value if the real estate tax value assessed according to Sections 218 ff. BewG exceeds the documented market value by at least 40%. Taxpayers will have to provide evidence for the lower value; normally this can be in the form of an appraisal by a competent committee of valuation experts or by a certified expert. Likewise, a purchase price that was agreed within a year before or after the date of the main assessment can serve as proof.
These new principles have to be applied to all cases that are still open. If a market value that is at least 40% lower is documented and no changes can be made to the real estate tax value then a value adjustment to correct errors has to be considered. Furthermore, a request for the suspension of enforcement should be complied with if it has been plausibly demonstrated that the real estate tax value exceeds the fair value by at least 40% even if the expert opinion on the fair value has not yet been made available. These adjustments should ensure that the tax charges will be assessed correctly and in conformity with the constitution; they will provide greater flexibility for taxpayers and protect them from inflated real estate tax values.