The Federal Constitutional Court (BVerfG) ruled on 10 April 2018 that the provisions of the Valuation Act on the standard valuation of real estate assets in the "old" federal states have been incompatible with the general principle of equality under Article 3 (1) of the Basic Law since the beginning of 2002.
In accordance with the provisions of the Valuation Act in the "old" federal states, standard values for real estate are still determined today on the basis of the values as at 1 January 1964 and form the basis for the assessment of property tax. The legislator's adherence to the main assessment date of 1964 leads to serious and comprehensive unequal treatment in the valuation of property assets, for which there is no sufficient justification. The legal and actual equal burden on taxpayers is not given with such a valuation of land. The suspension of the revaluation since 1964 has led to increasing value distortions within the real estate sector, as the deviations between the actual market value and the standardised values of the properties at the time of the main assessment have become ever greater over this period.
The fact that unequal treatment cannot be eliminated with reasonable administrative effort does not justify tolerating an unconstitutional situation. Nor can the suspension of the revaluation since 1964 be justified on the grounds of standardisation for simplification purposes.
The legislator must adopt a new regulation by 31 December 2019 at the latest. The unconstitutional rules may continue to be applied until this date. After the promulgation of a new regulation, they may be applied for a further five years from the date of promulgation, but no longer than 31 December 2024.
