Ruling and draft law on the calculation of the tax on second homes

  • 4 years ago

The Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) has recently examined a number of constitutional complaints by owners of second homes who complain about the previous assessment of their second home tax. For example, in the Bavarian municipalities of Sonthofen and Oberstdorf (AZ 1 BvR 807/12 and 1 BvR 2917/13) and in the municipalities of Friedrichskoog and Timmendorfer Strand in Schleswig-Holstein (AZ 2 LB 90/18 and 2 LB 92/18), it was found that the calculation of the second home tax there was based on the value ratios of 1964 and violated today's Basic Law.

Basically, the calculation of the 1964 real estate tax is calculated according to the regulations on unit valuation. According to the Federal Constitutional Court, these regulations are unconstitutional because they violate the general principle of equality under Article 3 (1) of the Basic Law. Thus, in the aforementioned municipalities, the second-home tax was calculated on the basis of the so-called annual gross rent of the 1964 rent index, plus the price indices for the standard of living.

The ruling states that this form of calculation will only be applied until the end of March 2020. Other municipalities that calculate the second-home tax according to the 1964 property tax will have to review their statutes. In October 2019, a majority in the Bundestag approved an amendment to the Basic Law and passed the property tax reform package. The law is to come into force on January 01, 2025.

Source: BvR
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