Overview
- Presenting the concept in the Bundestag, the SPD outlined a lifetime personal tax-free allowance of about €1 million per person and the end of the current ten-year reuse rule, with owner-occupied homes remaining tax-free if heirs continue to live in them.
- The plan adds a €5 million allowance for inherited businesses, replaces broad reliefs with progressive taxation, and permits tax payments to be stretched over up to 20 years; specific top rates are not yet set.
- SPD leaders cast the changes as fairness and simplification, projecting additional revenues in the low single-digit billions over time to be directed to education, though they expect initial budget effects to be modest.
- CDU/CSU figures and business groups warned of heavier burdens for family-owned SMEs and potential investment and job risks, while economists such as Clemens Fuest and Lars Feld cautioned that curbing existing business exemptions could deepen investment weakness.
- Supporters including economist Sebastian Dullien welcomed efforts to curb loopholes used by very large estates, and the SPD framed the paper as a basis for negotiations pending a ruling expected later this year, though not in the next few months.