Since 1 January 2025, the new federal property tax model (Grundsteuer-Bundesmodell) has applied to millions of properties in eleven federal states. It replaces the old standard values (Einheitswerte), some dating back to 1935, which the Federal Constitutional Court declared unconstitutional in 2018. Whether the new law is itself constitutional was disputed from the outset. On 12 November 2025, the Federal Fiscal Court (Bundesfinanzhof, BFH) issued its rulings in the proceedings II R 25/24, II R 31/24 and II R 3/25 three landmark judgments – thereby creating clarity, at least at the level of the highest tax court.

The case

In three parallel appeal proceedings, owners of residential properties challenged the property tax values determined under the federal model. In particular, they argued that the standardized valuation – based on standard land values (Bodenrichtwerte) and normalized rents – results in assessed values that significantly exceed the actual market value. According to the plaintiffs, this means the federal model violates the constitutional principle of equal tax burden.

The decision

The BFH dismissed the appeals. In the court's view, the federal property tax model is constitutional. In detail:

Standardization is permissible: The legislator is permitted to apply standardized methods in mass valuations. Individual deviations between the standardized tax value and the actual market value are unavoidable and constitutionally acceptable.

Standard land values (Bodenrichtwerte): The BFH considers deviations of the standard land value from the individual property of up to 30% to be tolerable. Within this range, there is no violation of the principle of equality.

Opening clause (Öffnungsklausel): Taxpayers whose property significantly deviates from the standardized value may provide evidence of a lower fair market value – an option that the legislator expressly left open.

The three parallel decisions cover different property constellations and thus signal a broad-based confirmation of the federal model.

What this means for property owners

The decision first means that objections to property tax value assessments based solely on the general unconstitutionality of the federal model have no prospect of success before the BFH. The federal model as such is thus settled.

Nevertheless, options for action remain:

• Proof of a lower value: Anyone who can prove that the individual market value of the property is significantly lower than the standardized tax value may provide corresponding counter-evidence. A qualified expert opinion may be used for this purpose.
• 30-percent threshold for standard land value: If the standard land value of the zone can be demonstrably shown to deviate by more than 30% from the actual land value of the individual property, the BFH's acceptance threshold is exceeded – an argument for a targeted objection.
• Constitutional complaint pending: The Federation of Taxpayers (Bund der Steuerzahler) and Haus & Grund Deutschland have announced that they will file a constitutional complaint with the Federal Constitutional Court. The final word has therefore not yet been spoken.

Conclusion

The BFH has classified the federal property tax model as constitutional – but has not issued a certificate of immunity. Anyone who identifies significant deviations between the standardized tax value and the actual market value of their property should have this reviewed by an expert. The opening clause for proving a lower value continues to exist – and given the pending constitutional complaint, further legal developments should be monitored.