🧾 Inheritance tax: allowances, reporting, tax classes
In brief
Heirs can be liable to tax. The tax depends on your relationship to the deceased and on the value of your inheritance.
There are three tax classes. Spouses, children and other close relatives are in class I with the highest allowances.
Allowances: spouse €500,000, child €400,000, grandchild €200,000 (€400,000 if the connecting parent died earlier), other persons in tax class I €100,000. Tax classes II and III €20,000 each.
You must report a taxable acquisition to the tax office (Finanzamt), within three months of learning of it.
Step by step
- Determine the tax classSpouse, child, grandchild, parent or another person?
- Roughly estimate the value of the inheritanceAssets minus estate debts and funeral costs.
- Check whether to reportIf a taxable acquisition is possible, report it within three months.
- Submit the returnIf the tax office asks for it: deadline of at least one month.
Deadlines
- No report is needed if a will was opened by a German court or notary and the relationship to the deceased is clear. Exceptions (§ 30 Abs. 3 ErbStG): real estate, business assets, assets abroad and shares in corporations, insofar as their acquisition must be reported under § 33 ErbStG. The will must have been opened by a German court, a German notary or a German consul.
- For the family home, a limit of 200 square metres of living space applies to children (§ 13 Nr. 4c ErbStG).
- The Federal Constitutional Court hears the case on privileges for business assets on 13 October 2026 (1 BvR 804/22). No judgment has been issued.
- Earlier acquisitions from the same person within the last ten years are added together and can use up allowances (§ 14 ErbStG).
In depth · legal basis, figures and practice – for advisers and professionals
Tax classes
§ 15 ErbStG: tax class I covers spouses, civil partners, children, stepchildren and their descendants and, for acquisitions upon death, parents and grandparents. Tax class II covers, among others, siblings, nephews and nieces, stepparents, children-in-law and divorced spouses. Tax class III covers all other acquirers.
Allowances
§ 16 ErbStG (unlimited tax liability): spouse and civil partner €500,000; children and children of deceased children €400,000 (no. 2); other descendants, such as grandchildren whose connecting child is alive, €200,000 (no. 3); other persons in tax class I €100,000; tax class II €20,000; tax class III €20,000.
Further allowances
§ 17 ErbStG: special pension allowance for the surviving spouse or civil partner €256,000, reduced by the capital value of non-taxable pension benefits. For children, graded by age: up to 5 years €52,000, over 5 to 10 years €41,000, over 10 to 15 years €30,700, over 15 to 20 years €20,500, over 20 to 27 years €10,300. § 13 Nr. 1 ErbStG: household effects up to €41,000 and other movable items up to €12,000 in class I; in classes II and III together up to €12,000.
Family home
§ 13 Abs. 1 Nr. 4b ErbStG: acquisition of the family home upon death by the spouse is exempt if the testator used it for their own residential purposes and the acquirer immediately intends it for own use as a residence. The exemption lapses retroactively if the acquirer gives up own use within ten years of the acquisition, except for compelling reasons. Nr. 4c: children and children of deceased children acquire it with relief up to 200 square metres of living space under the same conditions. Only houses or flats in Germany, in an EU state or in an EEA state are eligible.
Prior acquisitions
§ 14 ErbStG: several acquisitions from the same person within ten years are added together; for earlier acquisitions the tax office deducts the tax attributable to them. In this way, earlier gifts can use up the allowance.
Tax rates
§ 19 Abs. 1 ErbStG: tax rate by the value of the taxable acquisition, in percent for tax class I / II / III: up to €75,000 7 / 15 / 30; up to €300,000 11 / 20 / 30; up to €600,000 15 / 25 / 30; up to €6,000,000 19 / 30 / 30; up to €13,000,000 23 / 35 / 50; up to €26,000,000 27 / 40 / 50; above that 30 / 43 / 50. A hardship adjustment under § 19 Abs. 3 ErbStG prevents an acquisition just above a threshold from leading to a higher burden than would arise on an acquisition up to the threshold.
Reporting and return
§ 30 ErbStG: every acquisition subject to inheritance tax must be reported to the tax office within three months of learning of the succession. The acquirer is obliged to report. § 31 ErbStG: the tax office can demand a tax return from anyone involved in an acquisition; the deadline must be at least one month. Several heirs can submit a joint return.
Reform and case law
The Federal Constitutional Court has scheduled an oral hearing for 13 October 2026 in Karlsruhe (1 BvR 804/22). The subject is the constitutionality of the tax privileges and valuation rules on the transfer of business assets; the complainant inherited a securities account and real estate as private assets. According to media reports, a decision is not expected before 2027. Until then, existing law applies.
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