Property tax: Germany's Federal Fiscal Court declares the state model constitutional as well

Owners who have filed an objection against their property tax assessment usually hope for the same thing: that the reform fails in court and the matter resolves itself. That hope has grown smaller. On May 20, 2026, Germany's Federal Fiscal Court (BFH) announced that, after the federal model, it also finds no fault with the Baden-Württemberg state model.

What the Federal Fiscal Court decided

The ruling concerns two cases with the docket numbers II R 26/24 and II R 27/24. The key points:

• The provisions of Baden-Württemberg's state property tax act (Landesgrundsteuergesetz) on land valuation are not unconstitutional.
• The court dismissed both appeals.
• It declined a referral to Germany's Federal Constitutional Court, because it is not convinced that the rules are unconstitutional.

The last point carries the most weight. A court refers a matter to the Federal Constitutional Court only if it itself considers a provision unconstitutional. The Federal Fiscal Court does not take that view here.

For context: at the end of 2025, the Federal Fiscal Court had already ruled in three lead cases that the federal model does not violate Germany's constitution either. Both models reviewed so far have therefore held up. Even so, the question is not settled for good. Interest groups, among them the Taxpayers Federation (Bund der Steuerzahler), still want the property tax reviewed by the Federal Constitutional Court. For now, however, the route via the Federal Fiscal Court has been exhausted.

Proving a lower value remains the lever

For the individual owner, another detail is of greater practical importance than the constitutional question: the option of proving a lower property tax value. Owners who can show that their property is worth less than the assessed figure can have that figure corrected. This route remains open regardless of how the constitutional question is ultimately resolved.

This is exactly where the Federal Fiscal Court highlights a difference between the models. When it comes to proving a lower value, the Baden-Württemberg rules are more generous than the federal model. The federal model only allows such proof if the value deviates by more than 40 percent (Section 220 (2) sentence 2 of the German Valuation Act). How a value is determined in the first place and which factors drive it is explained in our guide on property valuation.

What this means for apartment owners

The property tax is one of the few items around a condominium that does not run through the property management company. It reaches every owner individually through their own assessment notice, and that is where it needs to be checked. Anyone waiting for the property manager to raise the topic is waiting in the wrong place.

For rented apartments, the property tax is an apportionable operating cost under Germany's Operating Costs Ordinance (Betriebskostenverordnung). It can therefore be passed on to the tenant through the service charge statement. What else belongs in that statement is covered in our guide on service charge statements.

Owners who have filed an objection should therefore temper their expectations of the reform being overturned. Whether an objection is still worthwhile in a specific case, for instance because the assessed value is too high, is an individual question. It belongs in professional tax advice, not in a general assessment.

Source: press release No. 032/26 of Germany's Federal Fiscal Court dated May 20, 2026. This article provides a general overview and is no substitute for legal or tax advice in individual cases.