“Hidden tax increase” and “campaign” – the current dispute over inheritance tax is a hot topic. Behind this is a change that could affect many real estate heirs. The most important points at a glance.

Inheritance tax is levied on the estate of a deceased. Depending on how the heirs were related to the deceased, different amounts of allowances apply – for a spouse around 500,000 euros, for a child 400,000 euros. Anyone who inherits a house or apartment from their partner and then lives in it usually pays no inheritance tax, regardless of the value. For children, this only applies to a living space of up to 200 square meters.

Otherwise, different tax rates apply up to a maximum of 50 percent. The same rules apply to gifts, i.e. the transfer of assets during one’s lifetime. Inheritance and gift tax are entirely the responsibility of the federal states. According to the Federal Statistical Office, a total of 11.1 billion euros were incurred last year.

Ultimately, it is about a technical formality: The traffic light wants to change the valuation standards for inherited real estate.

According to the Annual Tax Act 2022, the so-called Valuation Act, which regulates the tax valuation of assets, should be adapted to the real estate valuation regulation amended by the federal government at the time in July 2021. ) and the previous opinion of the tax authorities.”

The changes go back to a 16-year-old ruling by the Federal Constitutional Court: the judges decided in 2006 that the actual market value of real estate must be used as a basis for tax assessments. The regulation in force until then, which gave real estate preference over other assets in the tax assessment, was unconstitutional.

The changes envisaged in the annual tax law would result in houses and apartments being set at higher values ​​than before from next year. Depending on the individual case, higher taxes may also be due. The reason for this is the sharp rise in selling prices for real estate in recent years, particularly in metropolitan areas.

The Union and in particular CSU boss Markus Söder accuse Federal Finance Minister Christian Lindner (FDP) of a hidden tax increase, which he categorically rejects. He speaks of a “campaign” by the CSU.

However, Lindner recently advocated raising the allowances for inheritance and gift tax by around 25 percent. The Greens, in turn, find this wrong: The allowances are already “far above what people in Germany usually have” and “70 percent of Germans inherit nothing at all,” said Greens parliamentary group Vice President Andreas Audretsch.

The differences between the current and planned future regulations are shown in the following two tables:

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The Annual Tax Act 2022 has been passed by the Bundestag, but not yet by the Bundesrat. It is on the agenda there next Friday (December 16). The state chamber could reject the proposal – but it is questionable whether the particularly critical Bavaria can collect enough support from other states.

The reform for the new property tax is complex – and this year it will require owners. You have to submit some data to the tax office. You have to be very precise and observe special deadlines. In our large guide you will find all the information you need to know in a compact form.