Overview
- The Bundesverfassungsgericht will hold oral hearings on 12–13 October 2026 to decide whether core valuation rules, unchanged personal allowances and special reliefs for business assets violate the constitution.
- Bavaria's case argues that federal Freibeträge and tax rates have not been adjusted for price rises and that regional property-price differences and legislative competence must be re‑examined.
- A private complainant challenges the preferential treatment of inherited business assets, which under current law lets heirs keep 85 percent of qualifying company assets tax-free after five years and 100 percent after stricter conditions and longer holding periods.
- Critics say the Verschonungsbedarfsprüfung, which can grant relief for aggregated transfers above about €26 million, lets very large heirs demonstrate 'need' by shifting liquidity and thereby avoid tax, a practice described in court filings and reporting.
- A ruling, expected in early 2027, could force rapid legislative responses and affect hundreds of thousands of heirs, with experts and parties split between proposals to curb privileges and arguments that reliefs protect family firms and jobs.