What is the Freibetrag?

The Freibetrag is a personal tax-free allowance deducted before tax is calculated. It is €500,000 for a spouse or registered partner, €400,000 per child, €200,000 per grandchild, €100,000 for parents, and €20,000 for siblings and unrelated heirs.

How do the tax classes work?

There are three Steuerklassen. Class I covers spouses, children, grandchildren and parents and has the lowest rates (7–30%). Class II covers siblings, nieces, nephews and in-laws (15–43%). Class III covers everyone else, with rates of 30% or 50%.

Is German inheritance tax marginal or flat per band?

Unlike many countries, German inheritance tax is not marginal. The entire taxable acquisition is taxed at the single rate of the band it falls into. Crossing a band threshold therefore raises the rate on the whole amount, so values just above a threshold can be slightly worse off.

Is the family home exempt?

A family home can be inheritance-tax-free for a spouse or for children (up to 200 m²) if they continue to live in it for at least ten years. This exemption and the business-asset relief are not modelled here, so the tool may overstate tax where they apply.

Does each heir get their own allowance?

Yes. The Freibetrag is per heir and per relationship, and it renews every ten years for lifetime gifts. Splitting an estate across several close relatives, each with their own allowance, can substantially reduce the total tax.

Germany Erbschaftsteuer Calculator

The Germany Erbschaftsteuer Calculator estimates German inheritance tax for a single heir. The two levers that drive the result are the Freibetrag (personal allowance) and the Steuerklasse (tax class), both fixed by the heir’s relationship to the deceased. The tool applies the official allowances and the three-class rate table running from 7% to 50%.

How it works

The tool subtracts the heir’s Freibetrag from the inheritance value to get the taxable acquisition (steuerpflichtiger Erwerb):

taxable acquisition = max(0, inheritance − Freibetrag)

It then looks up the rate from the band the taxable amount falls into, using the heir’s tax class. Crucially, German inheritance tax is not marginal: the whole taxable acquisition is charged at that single rate. For example, in Class I a taxable amount up to €75,000 is taxed at 7%, up to €300,000 at 11%, up to €600,000 at 15%, and so on up to 30% above €26 million. Class III heirs pay a flat 30% up to €6 million and 50% above €13 million.

Example and notes

A child inheriting €700,000 deducts the €400,000 allowance, leaving €300,000. In Class I that falls in the 11% band, giving €33,000 of tax — an effective rate under 5% on the full inheritance. The same €700,000 going to an unrelated heir in Class III deducts only €20,000 and is taxed at 30%, around €204,000.

This is an estimate only. The family-home exemption, the Versorgungsfreibetrag for spouses and children, and the 85%/100% relief for qualifying business assets (Betriebsvermögen) are not modelled, so the tool can overstate tax where those reliefs apply. It is not tax advice — consult a Steuerberater for a binding figure.