Inheritance tax: allowances, the family home, notifying the tax office

Checked on 05.11.2026

Translated from German. Where anything differs, the German text counts: Deutsche Fassung

A house is quickly worth more than one thought, and then the question is whether tax is due. For many families the answer is no. Here are the amounts the law sets.

Each heir separately

What is taxed is not the estate but what each individual receives. Each heir has their own allowance, depending on their relationship to the deceased.

The allowances

Under § 16(1) ErbStG the following remain tax-free:

€500,000 for the spouse or registered civil partner,
€400,000 for each child, including stepchildren, and for grandchildren whose parent has already died,
€200,000 for other grandchildren,
€100,000 for the other persons of tax class I, for example parents inheriting from their child,
€20,000 for everyone else: siblings, nieces and nephews, unmarried partners, friends.

In addition there is a special pension allowance for the spouse (§ 17 ErbStG) and an allowance for household goods of €41,000 in tax class I (§ 13(1) no. 1 ErbStG).

The family home

The house or flat the deceased lived in can additionally remain tax-free (§ 13(1) nos. 4b and 4c ErbStG):

for the spouse, if they move in without delay or keep living there,
for children under the same condition, insofar as the living space does not exceed 200 square metres.

The exemption lapses retroactively if the acquirer no longer lives in the house themselves within ten years, unless compelling reasons prevent them. Who takes over the house and who is paid out can therefore make a tax difference. That belongs with a tax adviser before the agreement.

Notification: three months

Every acquisition must be notified to the tax office in writing within three months of learning of it (§ 30 ErbStG). Notification is not needed if the acquisition rests on a will opened by a German court or notary and the relationship to the deceased is clear from it. This exception does not apply if real estate, business assets or foreign assets are part of the acquisition. With an inherited house, notification is therefore the rule.

A tax return is filed by whoever the tax office asks to.

What may change

The Federal Constitutional Court heard the inheritance tax case in October 2026, including the level of the allowances. No decision had been given by early November 2026; the amounts stated apply unchanged.

What helps

Note the day you learned of the inheritance. The notification period depends on it.
Collect values on the day of death. Account balances, securities, land. The tax office values the land itself; your own valuation can prove a lower value.
Document debts and costs. They reduce the acquisition.
Ask before the division, not after.