Erbschaftsteuer Table 2026: Allowances and Tax Rates (7-50%) in Full

The three tax classes for Erbschaftsteuer

The Erbschaftsteuer is an acquisition-based tax: it taxes each individual recipient based on what they actually receive — not the estate as a whole. The Erbschaftsteuergesetz sorts heirs into three tax classes. The class determines both the allowance and the tax rate. The closer the family relationship, the more favourable the treatment.

Tax-class overview (§ 15 ErbStG)

Note the break: parents and grandparents fall into tax class I for inheritance cases (Freibetrag 100,000 EUR), but into class II when the transfer is a Schenkung (lifetime gift, taxed under ErbStG) with only 20,000 EUR. This split between inheritance and Schenkung is one of the best-known traps in the ErbStG and must be respected whenever a transfer-back is planned.

Freibetrag table under § 16 ErbStG (legal position 2026)

The personal Freibetrag is granted to each heir once. If the acquisition stays below it, no Erbschaftsteuer is due. Only the amount above the allowance is taxed.

Under § 16 ErbStG, the Freibetraege apply identically to inheritances and to a Schenkung. For lifetime transfers, the Freibetrag resets every ten years (§ 14 Abs. 1 ErbStG). For how to use that ten-year rhythm strategically, see the guide Schenkung Freibetrag: table and rules.

For married couples, it is worth taking a careful look at the Berliner Testament (reciprocal will between spouses making each other sole heir and children residual heirs, § 2269 BGB): this widely used arrangement often gives away real money because the children's Freibetrag is forfeited on the first death — a mistake that quickly costs six-figure sums on mid-sized and larger estates.

The debate around raising the Freibetraege

The personal Freibetraege have been nominally unchanged since the 2009 reform of the Erbschaftsteuer. In conurbations such as Munich, Frankfurt, Hamburg and Berlin, property prices have in some cases more than doubled. The practical consequence is that even modest single-family houses now trigger Erbschaftsteuer when passed to children. The Free State of Bavaria has repeatedly tabled Bundesrat initiatives to raise the allowances, but no federal agreement has been reached. For 2026 planning this means: no short-term increase is on the cards, and the current figures should be the basis of any plan.

Tax-rate table (§ 19 ErbStG)

Rates rise progressively with the taxable acquisition. The tax class determines which rate applies.

Important: the Erbschaftsteuer is not a marginal-rate tax. The applicable rate applies to the entire taxable acquisition, not only to the portion above the threshold. This can produce hard edges at bracket boundaries: a single extra euro can lift the rate on the whole amount.

The Federal Fiscal Court (Bundesfinanzhof, BFH) made this point explicit in its order of 20 February 2019 (BFH II B 83/18): the percentage tariffs of the Erbschaftsteuer apply to the entire acquisition. The taxable acquisition is not split into tranches with different rates. The only relief mechanism is the hardship adjustment under § 19 Abs. 3 ErbStG.

In my advisory practice I see this bracket effect almost every week — usually with mid-sized estates between 600,000 EUR and 750,000 EUR, where a clean allocation could save 30 to 60 percent of the tax.

Hardship adjustment (§ 19 Abs. 3 ErbStG)

To cushion the bracket effect, the law provides a hardship adjustment: if the taxable acquisition exceeds a threshold only slightly, the extra tax is capped so that no more than 50 percent of the excess is taken as additional tax. In practice the cleanest way to avoid the issue is deliberate planning of the acquisition — for example a targeted partial assignment to other heirs, so that no one ends up just above a bracket line.

Worked examples

Example 1: a child inherits from a parent

Facts: the father dies. His son inherits assets worth 650,000 EUR.

Example 2: spouse inherits the family home and cash

Facts: the wife dies. The husband inherits the owner-occupied Familienheim (value 400,000 EUR) and 300,000 EUR in cash. He continues to live in the house.

The Familienheim passes tax-free because the husband continues to live in it. What remains is below the Freibetrag. Bottom line: no Erbschaftsteuer.

Example 3: a sibling inherits

Facts: the brother dies without spouse or children. His sister inherits 200,000 EUR.

On 200,000 EUR the sister pays 36,000 EUR in Erbschaftsteuer — an effective rate of 18 percent. Had the same assets passed to a child, the 400,000 EUR Freibetrag would have produced no Erbschaftsteuer at all. The gap shows just how much the tax class drives the burden.

Example 4: a large estate passes to one child — three variants compared

Facts: a 55-year-old entrepreneur holds total assets of 2,000,000 EUR (real estate and securities). The sole heir is her daughter. The mother dies at age 80, so 25 years separate today from the inheritance. The asset base stays nominally constant in this simplified scenario.

Variant A — no planning, full inheritance:

Variant B — one lifetime Schenkung outside the ten-year window:

The mother transfers 400,000 EUR to her daughter tax-free 15 years before her death (a Schenkung within the Freibetrag under § 16 Abs. 1 Nr. 2 ErbStG). Because more than ten years pass between the Schenkung and the inheritance, no aggregation under § 14 ErbStG applies.

Variant C — two transfers in the ten-year rhythm:

The mother transfers 400,000 EUR twenty years before her death and another 400,000 EUR ten years before her death. Both transfers use the Freibetrag in full. At death, the daughter's Freibetrag is once again fully available.

Saving compared with Variant A: 152,000 EUR — exactly half. With additional structuring (reserved Niessbrauch (usufruct under § 1030 BGB — right to use and benefit from property without owning it), splitting across both parents, the Gueterstandsschaukel matrimonial-regime swing, including grandchildren), the burden can in practice often be cut by 70 to 90 percent. If you want to keep wealth and transfer it at the same time, the guide Niessbrauch on Schenkung: reservation models and tax savings sets out the key patterns. For business assets the Verschonungsabschlag under §§ 13a/13b ErbStG (tax exemption of 85 or 100 percent on qualifying business assets) is also relevant — it can take the tax on operating assets down to zero. Run your own numbers with the Erbschaftsteuer calculator.

Effective tax burden by estate band

The following table shows the Erbschaftsteuer at various estate sizes, in each case without planning and assuming a single heir (child, tax class I). The effective rate refers to the total estate, not to the taxable acquisition.

The burden rises disproportionately as soon as the bracket thresholds at 75,000 / 300,000 / 600,000 / 6,000,000 / 13,000,000 EUR are crossed — without planning the rate applies to the entire taxable acquisition (see BFH II B 83/18 above). For tax class II (siblings, nieces, nephews) the rates are significantly higher again — the effective spread between class I and class II runs at roughly ten percentage points for mid-sized estates.

A case from my practice: a Frankfurt family home meets the bracket effect

An anonymised case from my advisory practice illustrates the bracket effect in real life. A 67-year-old widow from Frankfurt's Westend district came to me in 2024 for a second opinion after her husband's death. Total estate around 1.15 million EUR: the Familienheim (market value per expert appraisal 720,000 EUR, owner-occupied), securities portfolio of 320,000 EUR, life-insurance policy of 110,000 EUR. Two adult children, neither living in the house.

The first tax adviser had calculated the Erbschaftsteuer at around 122,000 EUR (Familienheim exemption applied, but the bracket effect maxed out at the children's level). We identified three problems. First, the widow had originally wanted to install both children as heirs at 50 percent each — but the husband had left the Familienheim to her alone; splitting the rest of the estate pushed both children into the 15 percent bracket. Second, the Familienheim was tax-free for the widow but would be fully taxable on the second death without owner-occupation by the children. Third, the securities portfolio was carried on the books at acquisition cost — the real market value sat noticeably lower.

We deployed three levers. First, a partial disclaimer by the widow of 200,000 EUR in favour of the children with a notarial estate division — that pulled the children below the 600,000 EUR bracket line, dropping the rate to 11 percent. Second, an immediate transfer of the Familienheim with reserved Niessbrauch for the widow to one of the children — the later transfer value fell by the Niessbrauch capital value of roughly 220,000 EUR (using the children's Freibetrag of 400,000 EUR strategically). Third, a market-value update on the securities portfolio to the actual current value — a reduction of 45,000 EUR versus the book value.

The result: the Erbschaftsteuer at the first level (widow) stayed at zero. The tax at the second level (children) came down from around 122,000 EUR to roughly 38,000 EUR — a saving of 84,000 EUR from the three structural levers alone. Had we additionally started a Schenkung of the securities portfolio within the ten-year window (which the widow declined for emotional reasons), the burden would have dropped under 15,000 EUR.

From my work with Frankfurt heirs I know one thing: the bracket effect is the most underrated lever in the Erbschaftsteuer. A taxable acquisition of 600,001 EUR is taxed at 15 percent across the board. A taxable acquisition of 599,999 EUR is taxed at 11 percent. A 2 EUR difference in what is acquired produces 24,000 EUR in extra tax.

Versorgungsfreibetraege (§ 17 ErbStG)

On top of the personal Freibetrag under § 16 ErbStG, there is an additional Versorgungsfreibetrag (special pension-related allowance for surviving spouses and minor children, § 17 ErbStG). It is available only to the surviving spouse and to children up to age 27. The catch: this allowance is reduced by the capital value of any pension entitlements (widow's and orphan's pensions, occupational pensions) — in many cases nothing is left.

Versorgungsfreibetraege at a glance

Worked example: the husband dies. The widow (55) inherits 900,000 EUR. She is entitled to a statutory widow's pension with a capital value of 150,000 EUR.

• Personal Freibetrag: 500,000 EUR
• Versorgungsfreibetrag: 256,000 EUR minus 150,000 EUR (capital value of the widow's pension) = 106,000 EUR
• Total allowance: 606,000 EUR
• Taxable acquisition: 900,000 EUR minus 606,000 EUR = 294,000 EUR
• Erbschaftsteuer (class I, up to 300,000 EUR, 11 percent): 32,340 EUR

In practice the Versorgungsfreibetrag is often fully eaten up for widows of civil servants or recipients of large occupational pensions. It develops its full effect mostly for the self-employed and freelance professionals without statutory pension entitlements.

Tax exemption for the Familienheim

The owner-occupied family home can pass entirely tax-free under narrow conditions. The exemption is set out in § 13 Abs. 1 Nr. 4b and 4c ErbStG.

Conditions for the surviving spouse

• The deceased lived in the property until death
• The surviving spouse takes up owner-occupation without delay
• Owner-occupation continues for at least ten years
• No cap on living area

Conditions for children

• Same base conditions as for the spouse
• Additionally: the living area must not exceed 200 square metres
• If the living area is larger, the excess portion is taxable

In advisory conversations with Frankfurt heirs I regularly meet the assumption that a Niessbrauch on the Familienheim can secure the exemption when ownership passes to the children. That is exactly the structural error the BFH has warned against — see the blockquote below.

When the exemption falls away

If the heir gives up owner-occupation within ten years (sale, letting, moving out), the exemption falls away retrospectively. The Federal Fiscal Court reads this deadline strictly. Exceptions apply only on compelling grounds, for instance where the heir becomes a Pflegefall (protected care-need status with social-law consequences) and has to move into a care facility.

In its decision of 11 July 2019 (BFH II R 38/16), the Bundesfinanzhof made clear: the Familienheim exemption for the surviving spouse falls away retrospectively if the heir transfers ownership to a third party within ten years. That holds even where the heir keeps using the property as a residence on the basis of a lifetime Niessbrauch. So anyone who wants to gift the family home to the children during their lifetime and keep the exemption from the inheritance cannot secure that exemption via a reserved Niessbrauch.

The BFH case law of recent years has if anything tightened the conditions rather than loosened them: a job relocation, the wish to move because of a growing family, or personal conflict with neighbours are generally not enough under settled case law. What counts is that the heir is prevented from owner-occupation on objectively compelling grounds.

In its judgment of 1 December 2021 (BFH II R 18/20), the Bundesfinanzhof sharpened the test: the heir is prevented on compelling grounds where owner-occupation is objectively impossible or objectively unreasonable. Considerations of mere convenience do not suffice. Health impairments can constitute compelling grounds where they make independent household-running in the Familienheim unreasonable — decided in a dispute over a 1951-built single-family house abandoned because of structural defects and care needs.

Affected heirs should document the reasons for moving out and, if in doubt, get a second opinion from a tax adviser before giving up owner-occupation.

Valuation of real estate and businesses

The Erbschaftsteuer attaches to the market value of the estate. For cash and securities the valuation is straightforward. For real estate and businesses it gets harder.

Real-estate valuation

The tax office values real estate under the Bewertungsgesetz (BewG). Three methods can apply:

• Comparable-sales approach (Vergleichswertverfahren): for condominiums and terraced houses (comparison with similar sales)
• Income approach (Ertragswertverfahren): for let property (based on rental income)
• Cost approach (Sachwertverfahren): for owner-occupied detached and semi-detached homes (construction cost plus land value)

Since the reform of the Bewertungsgesetz through the 2022 annual tax act, in force from 1 January 2023, the values determined by the tax office are often closer to market than before — for the 2026 legal position those rules apply unchanged. In some cases the tax office now sets values above the actual market price. In that case you can submit a market-value appraisal from a publicly appointed expert. The tax office must use the lower figure (§ 198 BewG). For inherited property in high-priced locations a second opinion from a tax adviser usually pays off, to check the valuation approach and the need for an appraisal. The cost of a qualified market-value appraisal typically runs between 1,500 and 3,500 EUR — an investment that for larger property usually pays back many times over via the tax saving.

Business valuation

Business holdings are valued under the simplified income-capitalisation method (§ 199 BewG) or under recognised valuation standards (IDW S1). For business assets there are far-reaching relief rules (§§ 13a, 13b ErbStG) — depending on the model, 85 percent or 100 percent of operating assets can be exempt. The conditions are tight (wage-sum clause, retention period, administrative-assets test). For entrepreneurs a Holding structure (German tax-optimised holding company, typically with Schachtelprivileg under § 8b KStG) can offer further tax advantages.

Minimising Erbschaftsteuer: legal structuring options

1. Use Freibetraege via lifetime Schenkungen

Through timely Schenkungen in the ten-year rhythm, the Freibetraege can be used multiple times. A couple with two children can move up to 3,200,000 EUR tax-free over 20 years (4 × 400,000 EUR per ten-year window × 2 cycles).

2. Use the Familienheim exemption

Passing the family home to the spouse or the children with the ten-year window observed can save substantial Erbschaftsteuer. For children, the 200 square metre cap applies.

3. Deploy Niessbrauch

When real estate is transferred during lifetime, a reserved Niessbrauch can sharply reduce the taxable value of the Schenkung. The donor transfers ownership but retains the right to use and to income. The younger the donor, the higher the deduction — for a 55-year-old donor the Niessbrauch is typically valued at 40 to 50 percent of the property value.

4. The Gueterstandsschaukel (matrimonial-regime swing)

Couples can switch matrimonial regimes (from Zugewinngemeinschaft (community of accrued gains, the default matrimonial property regime in Germany) to Guetertrennung (separation of property, an opt-in matrimonial regime) and back) to realise the equalisation of accrued gains tax-free, moving wealth between spouses. For couples using a Berliner Testament in particular, this swing can help redistribute assets during lifetime and reduce the later Erbschaftsteuer burden.

5. Plan early

Most structuring options require timely planning. Anyone who acts only once the inheritance has occurred has barely any room left. Bottom line: succession planning belongs on the agenda by age 55 to 60 at the latest — the last years of life are too late.

Frequently asked questions

How high is the Erbschaftsteuer Freibetrag in 2026?

For 2026 the personal Freibetrag is 500,000 EUR for spouses, 400,000 EUR per parent for children and stepchildren, 200,000 EUR for grandchildren (if their parents are still alive) or 400,000 EUR (where the relevant parent has predeceased), and 20,000 EUR for distant relatives and non-relatives (§ 16 ErbStG). These figures have been unchanged since the 2009 reform of the Erbschaftsteuer.

When must the Erbschaftsteuer return be filed?

The tax office requests the return after the inheritance. The filing deadline is at least one month by statute, but in practice the tax office usually sets it at three months. Without a formal request there is no obligation to file a full return, but there is a notification duty within three months of becoming aware of the inheritance (§ 30 ErbStG).

Can the Erbschaftsteuer be paid in instalments?

Yes, under certain conditions. Where the acquisition is not immediately available as cash (typically with real estate), the Erbschaftsteuer can be deferred for up to ten years on application (§ 28 ErbStG). For the transfer of business assets, agricultural and forestry assets, or shares in corporations, special deferral rules apply, in some cases interest-free.

Are debts deducted from the estate?

Yes. Estate liabilities reduce the taxable acquisition (§ 10 Abs. 5 ErbStG). These include: debts of the deceased (loans, tax liabilities), inheritance costs (funeral, estate administration, executorship), and obligations under legacies and conditions. Inheritance costs are recognised on a flat-rate basis of 10,300 EUR without specific evidence (§ 10 Abs. 5 Nr. 3 ErbStG). Higher actual costs can be claimed with itemised proof.

Is there a notification duty on the inheritance?

Yes. Every heir must report the acquisition within three months to the competent inheritance and gift tax office (§ 30 ErbStG). The duty applies regardless of whether any Erbschaftsteuer is actually due. The exception: the acquisition is based on a notarised will or Erbvertrag (inheritance contract under § 2274 BGB, binding agreement between testator and heir), because in that case the notary transmits the information directly. What happens if the notification is missed is set out in the guide unreported Schenkung.

Do the same Freibetraege apply to a Schenkung?

Yes. The personal Freibetraege under § 16 ErbStG apply identically to inheritances and to a Schenkung. The decisive difference: for a Schenkung the allowance resets every ten years (§ 14 ErbStG). For an inheritance it can be used only once. That makes the lifetime Schenkung the single most important instrument of tax-driven succession planning.

What happens if several siblings jointly inherit the Familienheim?

The Familienheim exemption under § 13 Abs. 1 Nr. 4c ErbStG applies pro rata for each co-heir who actually takes up owner-occupation. If not all co-heirs move in, the exemption falls away for the non-occupying shares. In practice an estate division often helps, where one co-heir takes the house in full and pays the others out — a second opinion from a tax adviser almost always pays off here to find the most tax-efficient split.

Will the Erbschaftsteuer Freibetraege be raised in 2026?

No. Despite repeated political pushes — Bavaria in particular — no increase of the Freibetraege under § 16 ErbStG has been agreed for 2026. The figures of 500,000 EUR (spouses), 400,000 EUR (children) and 200,000 EUR (grandchildren) apply unchanged since 2009. Concrete succession planning should rely on the current figures; hoping for higher allowances is no solid planning basis.

How is foreign property treated for the Erbschaftsteuer?

Heirs resident in Germany are in principle subject to German Erbschaftsteuer on their worldwide assets (unlimited tax liability under § 2 ErbStG). Where foreign inheritance tax has already been paid, it can be credited against the German tax under § 21 ErbStG — but only for assets that were actually taxed there, and only up to the proportionate German tax. A double-taxation treaty avoids double burden only with a small number of countries (including the USA, Switzerland, France, Denmark, Sweden, Greece).

Final word

The Erbschaftsteuer in 2026 is plannable. Knowing the Freibetraege, the tax classes and the exemptions, the burden can be reduced significantly. The most important lever is early planning: lifetime Schenkungen, use of the ten-year rhythm, and the targeted combination of different Freibetraege can halve the burden in typical cases — and often more on larger estates.

Run the Erbschaftsteuer for your concrete case with the Erbschaftsteuer calculator. Use the Inheritance Navigator to build a personal checklist for your situation. For further detail on the legal framework, see the pages of the Federal Ministry of Finance.

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Questions on Erbschaftsteuer for 2026? As a tax adviser focused on wealth succession, I help you find the right structure. Book a no-obligation first meeting.

Further detail answers

• Erbschaftsteuer 2026: allowances, rates, instructions — main guide for the cluster
• Erbschaftsteuer Freibetraege — table 2026
• Erbschaftsteuer for children — allowance, rates, strategies
• Erbschaftsteuer on real estate and the family home
• Erbschaftsteuer for siblings — why it gets expensive
• Calculating Erbschaftsteuer — formula and calculator
• Topic hub Erbschaftsteuer

External sources and statutory texts

• ErbStG at dejure.org — full statutory text of the Erbschaftsteuer- und Schenkungsteuergesetz
• § 16 ErbStG at gesetze-im-internet.de — personal Freibetraege
• § 15 ErbStG at gesetze-im-internet.de — tax classes
• § 19 ErbStG at gesetze-im-internet.de — tax rates and hardship adjustment
• § 13 Abs. 1 Nr. 4 ErbStG at gesetze-im-internet.de — Familienheim exemption
• § 14 ErbStG at gesetze-im-internet.de — accounting for earlier acquisitions (ten-year window)
• § 198 BewG at gesetze-im-internet.de — proof of lower common value
• BFH, order of 20 February 2019 — II B 83/18 — percentage tariffs apply to the entire acquisition (bracket effect)
• BFH, judgment of 11 July 2019 — II R 38/16 — Familienheim exemption falls away on transfer of ownership despite Niessbrauch
• BFH, judgment of 1 December 2021 — II R 18/20 — compelling grounds preventing owner-occupation (health impairments)
• BVerfG, judgment of 17 December 2014 — 1 BvL 21/12 — §§ 13a, 13b ErbStG (business asset relief) unconstitutional until 2016
• Federal Ministry of Finance — inheritance and gift tax — official explanations from the BMF