Overview
- The Federal Constitutional Court held oral hearings on the inheritance tax over two days, with Bavaria's abstract challenge and a private constitutional complaint argued before the judges.
- Bavaria argued that federal rules on tax‑free allowances have not been updated since 2009 and should reflect regional property prices, while also questioning the Bundestag's competence to set those rules.
- A private plaintiff said heirs of private assets are treated worse than heirs of business assets, targeting the law that allows 85 percent relief for qualifying Betriebsvermögen after five years and full relief after seven years.
- Government statistics cited in the hearings showed that special reliefs and the Verschonungsbedarfsprüfung led to roughly €3.7 billion of taxes being effectively written off in 2025, concentrated in a very small number of cases.
- Legal experts told the court there are three likely outcomes—uphold, void, or temporarily maintain rules while ordering reform—and any ruling would leave lawmakers months to craft changes that could affect families, firms and state budgets.