- Freibetraege (personal tax-free allowances) are graded by degree of kinship and apply afresh every 10 years (§ 14 ErbStG): children EUR 400,000, spouses EUR 500,000, siblings EUR 20,000
The Freibetraege are the most important tool in Erbschaftsteuer (German inheritance tax) optimisation. Anyone who knows them and uses them can move multimillion-euro wealth tax-free to the next generation. Anyone who ignores them pays six figures to the tax office.
Erbschaftsteuer Freibetraege are not only inheritance allowances — they apply equally to Schenkungen. Anyone who uses the full Freibetrag every 10 years has transferred a multiple of it tax-free over 30 or 40 years.
The Freibetrag table 2026
| Degree of kinship | Steuerklasse (tax class under ErbStG) | Freibetrag |
|---|---|---|
| Spouses, registered civil partners | I | EUR 500,000 |
| Children, stepchildren, adopted children | I | EUR 400,000 |
| Grandchildren if parents predeceased | I | EUR 400,000 |
| Grandchildren if parents alive | I | EUR 200,000 |
| Great-grandchildren and further descendants | I | EUR 100,000 |
| Parents and grandparents on inheritance | I | EUR 100,000 |
| Parents and grandparents on gift | II | EUR 20,000 |
| Siblings, nieces, nephews | II | EUR 20,000 |
| Step-parents, sons- and daughters-in-law | II | EUR 20,000 |
| Divorced spouses | II | EUR 20,000 |
| All others (third parties) | III | EUR 20,000 |
Important: the Freibetraege apply PER ERBLASSER or PER SCHENKER (donor). With parents as donors, a child therefore has EUR 800,000 Freibetrag (EUR 400,000 from the father + EUR 400,000 from the mother).
Versorgungsfreibetraege on top
Above and beyond the Freibetrag, spouses and children have Versorgungsfreibetraege (§ 17 ErbStG):
| Group | Versorgungsfreibetrag |
|---|---|
| Spouses | EUR 256,000 |
| Children up to 5 years | EUR 52,000 |
| Children 5-10 years | EUR 41,000 |
| Children 10-15 years | EUR 30,700 |
| Children 15-20 years | EUR 20,500 |
| Children 20-27 years | EUR 10,300 |
ATTENTION: the Versorgungsfreibetraege are reduced by the capitalised value of survivor pensions (civil-service pensions, widows' or widowers' pensions, occupational old-age provision). For spouses of civil servants, often almost nothing remains.
Practical examples
Example 1: son inherits EUR 600,000 from his father
Class I, Freibetrag EUR 400,000. Taxable: EUR 200,000. Steuersatz (tax rate under ErbStG): 11 percent. Tax: EUR 22,000.
Example 2: wife inherits EUR 1,000,000 from her husband
Class I, Freibetrag EUR 500,000 + Versorgungsfreibetrag EUR 256,000 (provided there are no survivor benefits). Taxable: EUR 244,000. Steuersatz: 11 percent. Tax: EUR 26,840.
Example 3: brother inherits EUR 200,000 from his sister
Class II, Freibetrag only EUR 20,000. Taxable: EUR 180,000. Steuersatz: 20 percent. Tax: EUR 36,000.
Example 4: grandchild inherits EUR 250,000 (parents alive)
Class I, Freibetrag EUR 200,000. Taxable: EUR 50,000. Steuersatz: 7 percent. Tax: EUR 3,500.
Example 5: female life partner (unmarried) inherits EUR 100,000
Class III, Freibetrag EUR 20,000. Taxable: EUR 80,000. Steuersatz: 30 percent. Tax: EUR 24,000.
The 10-year rule (§ 14 ErbStG)
The most important optimisation rule: the Freibetraege apply afresh every 10 years. Anyone who starts gifting at 60 and uses the Freibetrag every 10 years has, by an inheritance at age 80, already transferred 3 tranches of EUR 800,000 tax-free (with married couple + one child = EUR 2.4 million tax-free).
Worked example: married couple aged 60, one child, wealth EUR 3,000,000.
| Time | Transfer | Freibetrag | Tax |
|---|---|---|---|
| Immediately (60) | Schenkung EUR 800,000 | 2x EUR 400,000 | EUR 0 |
| Plus 10 years (70) | Schenkung EUR 800,000 | 2x EUR 400,000 (reset) | EUR 0 |
| Plus 10 years (80) | Schenkung EUR 800,000 | 2x EUR 400,000 (reset) | EUR 0 |
| On death (remaining wealth) | EUR 600,000 | 2x EUR 400,000 (reset) | EUR 0 |
Total: EUR 3,000,000 transferred entirely tax-free. Without strategy: approximately EUR 460,000 in tax.
Flat-rate deductions
Beyond the Freibetraege, various flat-rate amounts reduce the taxable acquisition (§ 10 ErbStG):
| Item | Amount | Requirement |
|---|---|---|
| Funeral costs (without proof) | EUR 10,300 | Standard |
| Funeral costs (with proof) | Actual | Invoices |
| Household goods (Class I) | EUR 41,000 | Flat tax-free |
| Household goods (Class II/III) | EUR 12,000 | Flat tax-free |
| Other movable items (Class I) | EUR 12,000 | Flat |
| Family home spouses | Unlimited | Owner occupation 10 years |
| Family home children | up to 200 sqm | Owner occupation 10 years |
Step by step: use Freibetraege optimally in 6 stages
- Asset inventory. Which values exist, who are the potential Erben (heirs) / beneficiaries?
- Freibetrag mapping. Identify the available Freibetrag per Erbe / beneficiary.
- Plan the timeline. With wealth over EUR 1 million, use the 10-year strategy — several tranches across 20-30 years.
- Check chain-gift structures. Spouses can gift to each other (EUR 500,000 Freibetrag) in order to indirectly use higher Freibetraege for children — legally risky.
- Secure family-home relief. Document the owner-occupation requirement with real estate.
- Notarised contracts. Schenkungen above bagatelle thresholds ALWAYS via notary — proof problem otherwise with the tax office.
Frequently asked questions
How often do the Freibetraege apply?
Every 10 years afresh (§ 14 ErbStG). The deadline starts with the Schenkung — after 10 completed years from the Schenkung the Freibetrag is once again fully available.
Does the Freibetrag apply per donor or per recipient?
PER donor-recipient relationship. For parents to a child: EUR 400,000 from the father + EUR 400,000 from the mother = EUR 800,000. With three children: EUR 2,400,000 transferable tax-free every 10 years.
Can I transfer Freibetraege between heirs?
No. If a child does not use their Freibetrag (because they receive only a small inheritance), the unused part cannot be transferred to other children.
What happens when I combine multiple Schenkungen?
Schenkungen from the last 10 years are combined for the Freibetrag calculation (§ 14 ErbStG). Anyone who receives EUR 200,000 in one year and EUR 300,000 three years later from the same donor has EUR 500,000 in total — with a Freibetrag of EUR 400,000, so EUR 100,000 taxable.
Are there one-off Freibetraege per lifetime?
No, every 10 years afresh. Lifetime Freibetraege are alien to German law.
What about life insurance and pensions?
Life insurance is added to the estate and uses the Freibetrag (unless correctly structured with a separate beneficiary). Survivor pensions reduce the Versorgungsfreibetrag but do not belong to the normal estate.
Are foreign inheritances taxable?
If the Erblasser or the Erbe has unlimited German tax liability, yes — including for foreign assets (§ 2 ErbStG). Double-taxation treaties reduce the burden, but they do not exist for all countries.
How are household goods valued?
Class I heirs (spouses, children) have a flat Freibetrag of EUR 41,000 for household goods — anything below is tax-free. For Class II/III only EUR 12,000 flat. Antiques and collectors' items are valued separately.
Further detail answers
- Erbschaftsteuer 2026: allowances, tax rates, guide — Main guide
- Erbschaftsteuer for children — allowance, tax rates, strategies
- Erbschaftsteuer real estate and house
- Erbschaftsteuer for siblings
- Calculate Erbschaftsteuer — formula and calculator
- Erbschaftsteuer table 2026
- Topic hub Erbschaftsteuer
Lead magnet: use the Freibetraege
- Erbschaftsteuer calculator — Calculate the tax burden with your Freibetrag.
- Erbschaftsteuer quick check — Initial assessment in 5 questions.
- Succession checklist — 10-year strategy for using your Freibetrag.
- Arrange a first meeting — Individual Freibetrag optimisation.
Authority sources
- § 14 ErbStG (10-year rule, aggregation of earlier acquisitions)
- § 15 ErbStG (tax classes)
- § 16 ErbStG (personal allowances)
- § 17 ErbStG (Versorgungsfreibetrag)
- § 13 ErbStG (exemptions)
- § 10 ErbStG (taxable acquisition, flat rates)
- § 19 ErbStG (tax rates)
- § 2 ErbStG (personal tax liability)
- BFH judgment of 27.11.2019 — II R 1/16 (Freibetrag and Verschonungsabschlag)
- BFH judgment of 17.06.2020 — II R 33/17 (family-home exemption)
Free guide
Inheritance Tax Quick Check
Tax brackets, allowances, 5 levers
Compact PDF guide with all tables, 3 worked examples and the most important levers to reduce inheritance tax.
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- ✓ 3 worked examples plus 5 levers
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