The Federal Fiscal Court (BFH) declared the state real estate tax law of Baden-Württemberg constitutional in a sweeping ruling last Wednesday. The court rejected revisions in two separate cases, in which the plaintiffs had challenged the laws on the grounds of violating both general law and the Basic Law (German constitution).
In the first case, the dispute centered on a property in Karlsruhe. The owner sought a lower valuation of the real estate tax value, arguing that different usage areas should be assessed separately. However, the BFH confirmed the tax office’s calculation method, which used the complete land value for the assessment, finding no violation of federal or state law.
The second case involved a couple from Stuttgart who petitioned for a reduction in the real estate tax value due to factors such as traffic noise and other specific characteristics of their property. Here as well, the BFH upheld the tax office’s calculation, concluding that the law was not unconstitutional. Furthermore, the court stated that lawmakers are permitted to adopt standard and standardized rules when collecting real estate taxes in order to simplify administrative procedures.
These new real estate tax regulations have been in effect since last year. Following the ruling in Baden-Württemberg, the BFH faces pending cases concerning state models in Hamburg, Hesse, and Bavaria. The court currently plans for oral hearings regarding the state models in Hamburg and Hesse around November 2026, and the state model for Bavaria during the first half of 2027.
