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SPD to Present Inheritance Tax Overhaul With €1 Million Per Heir, €5 Million Business Exemption

Pressure from an expected Constitutional Court ruling sets the timetable for a compromise on how to tax large inheritances.

Overview

  • SPD leaders say the reform concept will be introduced in the Bundestag on Tuesday, with the party urging the Union to enter talks without preconditions.
  • An ARD‑reported paper outlines a lifetime allowance of about €1 million per heir and abolishes the ten‑year gifting rule, with owner‑occupied homes staying tax‑free if heirs keep living in them.
  • The plan adds a separate €5 million allowance for most family businesses and permits payment deferrals for up to 20 years to protect company liquidity, with tax rates yet to be specified.
  • The SPD projects small single‑digit billions in additional Länder revenue over time, with funds intended for schools, universities, and teacher workforce investment.
  • CSU figures dismiss higher burdens as “leistungfeindlich,” while economists diverge, with Ifo’s Clemens Fuest urging abolition or a very low flat tax and others emphasizing safeguards for viable firms.