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German inheritance tax 2026. Your tax-free allowance has been frozen since 2009. Prices have not.

A child inherits €400,000 tax-free from each parent. That figure has been in the law since 2009. Since then prices have risen 43%: in real terms the allowance is worth only ≈ €279,000 today. Anyone who inherits a house therefore often pays tax where their parents would never have expected any.

Federal Constitutional Court hears the case on 12 and 13 October

Updated on · Michael Jung, Broker specialising in tangible assets

The tax-free allowance

What is your tax-free allowance still worth today?

In the law, dashed

€400,000

Real value in 2026

≈ €279,000

20092026
A child's tax-free allowance has stood unchanged at €400,000 since 2009. Measured against 2009 prices, in 2026 it is worth only ≈ €279,000.

The same house, five times the tax. Not because your family grew richer. Because the figure in the law stayed put.

5 ×
as much inheritance tax is paid by a child on a house of the same real value: €3,500 for an inheritance in 2009, €17,875 after a 25% rise in prices (worked example)
≈ €573,000
How high a child's tax-free allowance would have to be today to be worth as much as in 2009
€21.4 billion
Inheritance and gift tax revenue in 2025, a record: +60.8% on the previous year

Calculator

How much inheritance tax will your heirs pay?

Enter who inherits and with what share. The family home you live in counts separately.

The family home stays tax-free for a spouse and children if they live in it themselves for ten years; for children, up to 200 m².

Who inherits, and with what share?

  • 50 % · €600,000

  • 25 % · €300,000

  • 25 % · €300,000

The shares are set in proportion: 50/25/25 and 2/1/1 come to the same thing.

HeirReceivesTax-free (home)AllowanceRateTax
Spouse€600,000€250,000€500,000—€0
Child€300,000€125,000€400,000—€0
Child€300,000€125,000€400,000—€0
Inheritance tax in total
€0
The heirs keep
€1,200,000

The tax-free allowances still cover this. No inheritance tax falls due.

Every ten years the same allowances are available again. With this split, that comes to €1,300,000. Start early and you give away in your lifetime what would otherwise be taxed.

Simplified: personal allowances and the family home. The pension allowance of €256,000 for a spouse is deliberately left out. It is reduced by the value of the survivor's pension, and with a statutory pension usually nothing is left of it. Earlier gifts and business assets are missing too. Not tax advice: the binding tax is set by the tax office.

With €1,200,000 and this split, no inheritance tax falls due.

How does this look in your family? Just ask:+49 170 7676706Free of charge, no appointment needed. Consultations in German and English.

The same calculator with its own address, to pass on and to print: inheritance tax calculator.

Federal Constitutional Court

What does Karlsruhe review in October?

  • 12 October 2026

    Are the tax-free allowances too low?

    Bavaria considers the allowances, the tax rates and the valuation of property unconstitutional, not least because they were never adjusted to prices. The outcome could give heirs relief.

  • 13 October 2026

    Are business heirs treated too gently?

    A man inherited a securities account and land from his aunt and paid in full. For business heirs, 85–100% can stay tax-free. If that exception falls, it will mainly hit family firms.

·

A ruling will come in 2027 at the earliest. Until then, today's law applies. What applies afterwards, nobody knows.

2027
A ruling is not expected until 2027. Four to five months usually pass between hearing and ruling.
3 ×
the Federal Constitutional Court has already found fault with inheritance tax: in 1995, 2006 and 2014. Each time, lawmakers had to make amendments.

Politics

And politics? A concept, not a law.

Today parents can give each child €400,000 tax-free every ten years. The “FairErben” concept of the Social Democrats (SPD) would turn that into one allowance for a whole lifetime: €900,000. Anyone giving over decades could then pass on less tax-free than today. Nothing has been decided.

What you can do

Do not wait for Karlsruhe. Three steps.

  1. 01

    Do the maths

    What is your wealth worth today, who inherits, how much tax falls due? The calculator gives a first sense of it. The binding figure is set by the tax office.

  2. 02

    Give early

    Every tax-free allowance is available again every ten years. Start early and you can use it more than once. Wait, and you may only get to use it once.

  3. 03

    Cover the tax

    So that nobody has to sell the family home to pay the tax: a term life insurance policy can provide exactly that amount. Michael Jung compares the providers as an insurance broker (§ 34d of the German Trade Regulation Act, GewO).

More on all the risks in the asset protection overview.

Common questions

Answered briefly.

When will the Federal Constitutional Court decide?

The hearing is on 12 and 13 October 2026. A ruling is not expected until 2027; four to five months usually pass. Until then, today's law applies.

Is the family home tax-free?

It can stay tax-free if you, as a child or spouse, live in it yourself for ten years. For children this applies up to 200 m² of living space. Anyone who moves out or lets it earlier has to pay the tax after all.

How often can I give tax-free?

Every ten years, up to the amount of the allowance, so €400,000 per parent for a child. Earlier gifts within ten years are added together.

Read on

More about your wealth. Short, with sources.

Michael Jung

Written and reviewed by

Michael Jung

Broker specialising in tangible assets · Insurance broker

  • 1996Certified Insurance Specialist (Geprüfter Versicherungskaufmann, IHK)
  • 2003Certified Finance Specialist (Geprüfter Finanzwirt, bbw)
  • 2005Master Consultant in Finance
  • 2016–17Senior Consultant, precious metals advisor (Edelmetallberater, GG-Akademie Berlin)
  • 2021Certified under DIN 77230, the German standard for financial analysis (DEFINO)
  • 2023Florida Premium Real Estate certification

Insurance broker licensed under § 34d GewO · German register of intermediaries D-5D7P-3694H-28 · Last reviewed on

Free initial consultation

How much tax is coming your family's way?

Michael Jung goes through the figures with you, before Karlsruhe decides. Free and without obligation.

+49 170 7676706

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Consultations in German and English.