You inherit money, property or investments in Germany. How much stays after tax? German inheritance tax (Erbschaftsteuer, ErbStG) depends on two factors: your relationship to the deceased and the inheritance value. Our inheritance tax calculator gives you the answer instantly.
How Does German Inheritance Tax Work?
German inheritance tax follows a simple principle: the closer the relationship, the higher the exemption and the lower the tax rate. The law defines three tax classes (Steuerklassen).
Important: German inheritance tax uses full-bracket taxation (Vollmengenstaffel), not marginal rates. The tax rate applies to the entire taxable amount — not just the portion above the threshold.
The Three Tax Classes
| Tax Class | Persons |
|---|---|
| I | Spouse, registered partner, children, stepchildren, grandchildren, parents and grandparents (on inheritance) |
| II | Siblings, nieces, nephews, step-parents, parents-in-law, divorced spouse |
| III | All other persons (friends, unmarried partners, distant relatives) |
Tax-Free Exemptions by Relationship
| Relationship | Exemption | Tax Class |
|---|---|---|
| Spouse / Registered Partner | €500,000 | I |
| Children / Stepchildren | €400,000 | I |
| Grandchildren | €200,000 | I |
| Parents / Grandparents (inheritance) | €100,000 | I |
| Siblings, Nieces, Nephews | €20,000 | II |
| Unrelated Persons | €20,000 | III |
Tax Rates by Class
| Taxable Amount | Class I | Class II | Class 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% |
| over €26,000,000 | 30% | 43% | 50% |
Example 1: Child Inherits €600,000
A child inherits €600,000 from a parent. Tax class I, exemption €400,000.
Taxable amount: 600,000 − 400,000 = €200,000
€200,000 falls in the “up to €300,000” bracket → tax rate 11%.
Inheritance tax: 200,000 × 11% = €22,000
Net inheritance: €578,000.
Example 2: Sibling Inherits €150,000
A brother inherits €150,000. Tax class II, exemption €20,000.
Taxable amount: 150,000 − 20,000 = €130,000
€130,000 falls in the “up to €300,000” bracket → tax rate 20%.
Inheritance tax: 130,000 × 20% = €26,000
Net inheritance: €124,000. Siblings face a much higher tax burden than children.
Example 3: Unrelated Person, €100,000
A friend inherits €100,000. Tax class III, exemption €20,000.
Taxable amount: 100,000 − 20,000 = €80,000
€80,000 falls in the “up to €300,000” bracket → tax rate 30%.
Inheritance tax: 80,000 × 30% = €24,000
Net inheritance: €76,000. Nearly a quarter goes to the tax office.
Full-Bracket vs. Marginal Tax Rates
Unlike German income tax, inheritance tax uses full-bracket taxation (Vollmengenstaffel). The tax rate applies to the entire taxable amount, not just the portion above the bracket threshold.
This can create cliff effects: a taxable amount of €75,001 in class I jumps from 7% to 11% — the tax increases from €5,250 to €8,250. The law provides a hardship adjustment (§19(3) ErbStG) to soften this jump.
Tips for Inheritance Tax Planning
- Exemptions renew every 10 years: Exemptions can be used again every 10 years. Early gifts reduce the total tax burden.
- Transfer property during lifetime: Owner-occupied property can be transferred tax-free to a spouse or children under certain conditions.
- Maintenance allowance: Spouses receive an additional maintenance allowance of €256,000. Children receive up to €52,000 depending on age.
- Consult a tax advisor: For larger inheritances, professional advice pays off. Rules for business assets and real estate are complex.
Disclaimer
This calculator provides an estimate based on German inheritance tax law (ErbStG). It does not replace professional tax advice. Special cases like business assets, maintenance allowances or exemptions for owner-occupied property are not included.
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