German Inheritance & Gift Tax 2026: Thresholds & Rules

A death in the family is always painful — and German inheritance tax law doesn’t make it any easier. At the same time, a few weeks decide on deadlines, thresholds, and family-home exemptions that can mean the difference between zero tax and six-figure payments. This guide covers the key 2026 numbers, levers, and traps.

In short: German inheritance tax (Erbschaftsteuer) and gift tax (Schenkungsteuer) follow the same rules. Thresholds depend on family relationship: spouse €500,000, child €400,000, grandchild €200,000, unmarried partners and siblings only €20,000. A jointly used family home can pass tax-free to a spouse (if they keep living there 10 years). Every inheritance must be reported within 3 months to the Finanzamt. Gifts reset every 10 years.

The 2026 thresholds: who gets how much?

The threshold (Freibetrag) is the tax-free amount you can inherit or be given. Above that, inheritance or gift tax kicks in.

Relationship to deceased/donor	Threshold	Tax class
Spouse / registered partner	€500,000	I
Children + children of deceased children	€400,000	I
Grandchildren (if parent still lives)	€200,000	I
Parents / grandparents (on inheritance)	€100,000	I
Parents / grandparents (on gifts)	€20,000	II
Siblings, nieces, nephews, step-parents	€20,000	II
Unmarried partners, distant relatives, friends	€20,000	III

Important:

• Threshold is per person, per inheritance or gift within 10 years
• Children: €400,000 per parent, not split. Mother AND father each contribute €400,000 tax-free = €800,000 per child.
• Registered same-sex partnerships have followed the same rules as marriages since 2010.

Tax classes and rates

Above the threshold you pay inheritance tax. How much depends on the amount and the tax class.

2026 rates (by taxable acquisition value)

Value above threshold up to	Class I	Class II	Class III
€75,000	7%	15%	30%
€300,000	11%	20%	30%
€600,000	15%	25%	30%
€6,000,000	19%	30%	30%
€13,000,000	23%	35%	50%
€26,000,000	27%	40%	50%
above €26,000,000	30%	43%	50%

Classes:

• Class I = spouses, children, grandchildren (lowest rates)
• Class II = siblings, nephews, nieces, children-in-law, step-parents
• Class III = everyone else, including unmarried partners (highest rates)

Worked examples

Child inherits €600,000 from a parent (Class I):

• Threshold: €400,000
• Taxable base: €200,000
• Rate (up to €300k): 11%
• Inheritance tax: €22,000

Unmarried partner inherits €500,000 (Class III):

• Threshold: €20,000
• Taxable base: €480,000
• Rate (up to €600k): 30%
• Inheritance tax: €144,000

Same estate value, completely different tax bill — because of the missing marriage. One of the harsh lessons of German inheritance tax.

The family home: the key lever for spouses

The family home (Familienheim) — the apartment or house the deceased and the heir lived in together — can be completely tax-free under certain conditions.

For spouses / registered partners

• Value doesn’t matter — even a €3 million house can pass tax-free
• Condition: the surviving spouse lives in the home themselves for at least 10 more years
• Moving out within 10 years (without a compelling reason like a nursing home) voids the exemption retroactively

For children

• Tax-free up to 200 m² of living space
• Larger homes: above 200 m² the surplus is taxed pro-rata
• 10 years of own use also required

Practical example

Werner inherits from his deceased wife:

• Jointly used home, worth €650,000
• Cash and brokerage account €300,000

Without family-home exemption:

• Total €950,000 − threshold €500,000 = €450,000 taxable
• Class I, up to €600k: 15% → €67,500 tax

With family-home exemption + Zugewinn equalisation:

• Home €650,000 fully exempt
• Cash/account €300,000 under the €500,000 threshold
• No inheritance tax. Savings: €67,500.

Condition: Werner lives in the home for the next 10 years.

The notional Zugewinnausgleich: an extra bonus for spouses

For couples in Zugewinngemeinschaft (the default matrimonial regime without a prenup), there’s an additional notional accrued-gains equalisation (Zugewinnausgleich) on top of the threshold.

Core idea: in a divorce, the surviving spouse would have been entitled to half the gain during the marriage. This portion is recognised as a tax-free deduction on the estate.

Depending on how wealth grew during the marriage, this can be tens to hundreds of thousands of additional euros tax-free. A Steuerberater is worth it from six-figure wealth upwards.

The 10-year rule on gifts

The most strategically important rule of German gift tax: thresholds can be used in full every 10 years.

That means:

• A parent can gift a child €400,000 every 10 years — fully tax-free
• Both parents combined: €800,000 every 10 years
• Over 30 years, €2.4 million per child can be transferred tax-free

Important: aggregation in the 10-year window

• All gifts between the same two people within 10 years are added up
• After 10 years the threshold resets
• An inheritance also counts toward the 10-year window of earlier gifts from the same person

Example: staggered gifting

Petra (65) wants to transfer €600,000 to her son. Two strategies:

Strategy A — gift it all at once:

• €600,000 gift today
• Threshold €400,000 → €200,000 taxable
• Class I, up to €300k: 11% → €22,000 tax

Strategy B — spread over 10+ years:

• Today: €400,000 gift → tax-free
• In 11 years: €200,000 gift → within new €400k threshold → tax-free
• Total: €0 tax

When there’s time and liquidity, staggering almost always wins.

The 3-month notice: the deadline people forget

Mandatory for every heir and every gift recipient — even amounts below the threshold:

• Deadline: 3 months after becoming aware
• Where: Finanzamt at the residence of the heir/recipient
• Format: informal letter with:
  • your name, address, Steuer-ID
  • date of death/gift, name and last residence of deceased/donor
  • estimated value of the acquisition
  • relationship

Important: notarised events (probate, notarised gift) are automatically reported by the notary. Everything else — private will, cash gift, savings-book transfer — you must report yourself.

Template for the 3-month notice

To Finanzamt [city] — Inheritance Tax Department

Notice of inheritance under §30 ErbStG

I hereby notify you of the following case:

- Deceased: [name, last residence, date of death] - Heir: me, [name, address, Steuer-ID] - Relationship: [e.g. son/daughter] - Estimated value of acquisition: approx. [€]

Best regards …

If the threshold is exceeded, the Finanzamt will later request a full inheritance tax return.

Real-estate valuation: the big lever

For real estate, value is the switch that controls your tax bill.

• The Finanzamt uses the Bedarfswertverfahren — often an average based on land reference values and comparable sales
• You can prove a lower, more realistic value with a Sachverständigen-Gutachten (expert appraisal)
• Appraisal cost: €1,500–€4,000 — often pays off from €300,000 property values upwards

Tip: For borderline cases (just above the threshold), an appraisal quickly pays off. Each €100,000 less in property value reduces tax by €11,000-€30,000, depending on the class.

Related topics

• What to do when you get a Finanzamt letter — if an inheritance-tax assessment is unclear
• Tax class change in Germany — when wealth structure changes
• Severance pay tax in Germany — for job transitions that often go alongside estate planning

Common mistakes

1. Missing the 3-month deadline. The informal notice is simple but often forgotten. Mandatory even for tax-free cases.
2. Confusing “per parent”. Children have €400,000 per parent — when both parents have passed, a total of €800,000.
3. Breaking the family-home 10-year rule. Moving out within 10 years voids the exemption retroactively — an expensive mistake if relocation comes up later.
4. Ignoring unmarried status. Without a marriage certificate, high wealth levels mean hundreds of thousands of euros in tax. Marriage or registered partnership saves that.
5. Not aggregating gifts. If you’ve already gifted in the last 10 years, the Finanzamt adds it up.
6. Accepting the Finanzamt’s property value. For borderline cases, an appraisal is almost always worth it.
7. Trying international inheritance solo. Cross-border cases are a tax-advisor topic — with treaties and residence questions.

How Restio helps

Inheritance and gift tax are topics where panic hits 4 weeks before the deadline — and that doesn’t have to be the case. Restio helps you structure it:

• Deadline guardian — enter the date of death or gift, Restio counts the 3-month deadline and sends timely reminders.
• Threshold calculator — choose the relationship, enter the value, Restio shows tax-free portion, tax due, class, and possible exemptions.
• Gift planner — simulate staggered gifting over 10-20 years; Restio shows the optimal distribution for zero tax.
• Notice template — ready-to-send 3-month notice, adapted to your situation.
• Instant answers — “My partner died, we weren’t married”, “Does the 10-year family-home rule apply in the case of a care home?”, “What counts toward Zugewinnausgleich?” — in English or German.
• Steuerberater referral — for wealth above €500,000 or complex constellations (international, business assets), Restio connects you with specialists.

7-day free trial. €6.99 per month — deductible. For a single case involving the family-home condition, Restio pays for itself many times over.

Inheritance and gift tax are planning topics, not emergency topics — but only if addressed in time. The good news: with the right thresholds, the family-home lever, and the 10-year rule, families with mid-size wealth can almost always reach €0 in tax.