If you have recently bought, inherited, or been gifted a property, you might be in for an unpleasant surprise when calculating your taxes. The tax office doesn’t just consider the price you paid (or the value stated in the deed)—they rely on a reference value set by the government. The problem? This reference value is often higher than the actual market price, meaning you could end up paying more tax than necessary. But here’s the good news: you can challenge it.
What is the reference value and why does it matter?
When you acquire a property, the tax office calculates your tax bill based on the higher of these two figures:
• The reference value determined by the authorities.
• The declared purchase price (or the value stated in an inheritance or donation deed).
If the reference value is inflated, you pay extra tax, even if you bought the property at a fair market rate. That is why it’s crucial to check whether this valuation is accurate and fair.
How to challenge an unfair valuation
If you believe the tax office has overestimated your property’s value, there are two ways to contest it:
- Pay first, challenge later. This is the safest option. You file your tax return based on the reference value, but then submit a request for correction with proof that the valuation is too high. This approach avoids potential fines while you argue your case.
- Declare the real value and wait for the tax office’s response. In this case, you can file your tax return using what you believe is the correct value. If the tax authorities disagree, they will initiate a review process, giving you the opportunity to defend your valuation.
While the first option is less risky, both can be effective depending on your situation.
Gathering evidence: proving the valuation is incorrect
The tax office won’t simply take your word for it—you need strong evidence to support your claim. The most convincing proof includes:
• A professional valuation report from an independent property assessor.
• Photographs showing the true condition of the property (especially if it needs repairs).
• Comparable sales data, demonstrating that similar properties in the area have sold for less.
These documents can help you prove that the official reference value does not reflect the real market price.
When the reference value should not apply at all
In some cases, a reference value should not have been assigned in the first place. If your property falls into one of these categories, you may not even need to challenge the number—you just need to prove that it should not exist at all.
- Illegally occupied properties. If the property is occupied at the time of transfer, it is unfair for the tax office to apply a standard market valuation.
- Dilapidated or uninhabitable homes. A property in a deteriorated condition is unlikely to match the official reference value.
- Price-regulated properties. If the property is subject to government-regulated pricing (such as subsidised housing), the reference value should never exceed the official price limit.
Final thoughts
Before accepting the reference value at face value, double-check that it aligns with reality. If it seems too high, gather evidence and challenge it. A little effort could save you a significant amount on taxes.
