Germany Inheritance Tax Allowances Guide (Steuerfreibeträge bei Erbschaft)
A comprehensive guide to the inheritance tax allowances (Steuerfreibeträge) by Steuerklasse in Germany — spouse €500,000, children €400,000, grandchildren €200,000, and the additional Versorgungsfreibetrag (pension allowance). Includes the 10-year aggregation rule for gifts (Zusammenrechnung von Schenkungen) and the tax-free inherited home.
German inheritance tax (Erbschaftsteuer) provides generous tax-free allowances (Freibeträge) that vary significantly by relationship. These allowances can be used once every 10 years for gifts, making systematic lifetime gifting a powerful tax planning strategy. Amounts above the allowance are taxed at progressive rates depending on Steuerklasse. For related reading, see our Inheritance & Gift Tax Guide → and Estate Planning Guide →.
Tax-Free Allowances (Freibeträge) by Relationship
- Spouse / civil partner (Ehegatte / eingetragener Lebenspartner): €500,000 allowance (Steuerklasse I). Additionally, a special pension allowance (Versorgungsfreibetrag) of €256,000 applies to inheritances consisting of pension rights or life insurance proceeds intended to replace lost support.
- Children (Kinder) per child: €400,000 allowance + a Versorgungsfreibetrag of €52,000 for children under 27 (reducing with age). Stepchildren and adopted children are treated the same as biological children.
- Grandchildren (Enkel): €200,000 allowance per grandchild. If a grandchild's parent (the child of the deceased) is already deceased, the grandchild's allowance increases to €400,000 (stepping into the parent's shoes).
- Parents / grandparents (when inheriting): €100,000 allowance per parent. Only applies to inheritances, not gifts.
- Siblings, nieces/nephews, step-parents, divorced spouse: €20,000 allowance (Steuerklasse II).
- Non-relatives (Übrige): €20,000 allowance (Steuerklasse III).
Key Rules: 10-Year Aggregation and Property Exemptions
- 10-year aggregation rule (Zusammenrechnungszeitraum): All gifts received from the same donor within 10 years before death are aggregated with the inheritance for tax calculation. Each successive gift within the 10-year window reduces the available allowance. Strategy: make gifts at 10-year intervals to reset the allowance.
- Self-occupied home (Familienheim): A house or apartment inherited by a surviving spouse is tax-free if the spouse lives in it for at least 10 years (and it does not exceed 200m²). Children who inherit a home are also exempt if they live in it for 10+ years — but only up to 200m². Any rental property does not qualify.
- Household goods and personal effects: In Steuerklasse I, household goods up to €41,000 (including clothing, furniture, jewelry) are tax-free. In Steuerklassen II and III, only €12,000 is exempt. Art collections and luxury items may be subject to special valuation rules.