Effects of the ruling of the Munich Fiscal Court (4 K 1385/23) on the practice of real estate valuation

The Munich Fiscal Court has issued an exciting ruling in the area of real estate valuation (case no. 4 K 1385/23). This ruling concerns the adjustment of the standard land value to the legally possible floor area ratio (GFZ) on the valuation date.

Content of the ruling

The main issue was how to calculate the standard land value of a property if the actual development differs from the GFZ stated in the standard land value. The tax office had calculated the standard land value for a property with an actual GFZ of 0.65, although the legally permissible GFZ was only 0.4 due to a development plan. The tax court ruled that the standard land value had to be adjusted to the legally permissible GFZ.

Key reasons for the decision

1. Binding nature of the standard land value: The court clarified that standard land values determined by expert committees are binding for the tax offices and courts. An adjustment of the standard land value is only permissible if the property could legally be built on with the deviating GFZ on the valuation date.

2. No consideration of the protection of existing buildings: Although the building on the property enjoyed protection of existing buildings, this was not allowed to be included in the needs assessment in accordance with the Valuation Act (BewG). Only the legally permissible development on the valuation date is relevant.

3. Conversion of the standard land values: The standard land value had to be converted to the legally permissible GFZ of 0.4. Specific conversion coefficients were used for this purpose, which were provided by the expert committee.

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Practical consequences for real estate valuation

The temptation to adopt the standard land value without checking it is great. However, issues such as permissible floor area ratios, plot size, actual building development, etc. can make a big difference to the valuation of the part of the property.

Therefore, a careful examination of the given circumstances and data should be carried out not only for the building, but also for the plot. On the one hand, this can have a positive effect on the property valuation, but it can also protect against unpleasant surprises during the assessment.

The effects of such conversions of the standard land value are enormous given the usually high property values, and it remains to be seen how the BFH will view this due to the permitted appeal.