Inheritance Tax 2026: New Record High Reported

Impact on the Federal States

The political debate features opposing positions. Supporters of an increase point to additional funds for the federal budget and to reducing inequality. Critics, on the other hand, warn of burdens on family businesses and of possible negative effects on investment and jobs.

Revenues from inheritance and gift tax flow to the federal states. Individual federal states such as Bavaria or North Rhine-Westphalia benefit disproportionately, because an above-average number of wealth-rich decedents have their residence there. The Free State of Bavaria also records disproportionate revenues in the Federal Office's statistics.

Outlook on the Federal Budget

Previous reform proposals aim, among other things, at raising personal allowances, tightening the rules for business assets, and reintroducing a wealth tax. How quickly such measures could be implemented remains open, as a reform of inheritance tax law requires a majority in the Bundestag and in the state chambers.

Observers see the current record high as a signal that the importance of inheritance tax for the state revenue side is growing. At the same time, it remains controversial to what extent the existing rules can still be considered up to date. The federal budget could receive additional funds through reform.

International Comparison

The debate is also being conducted from an international comparative perspective. In several European neighboring countries, tax rates on inheritances are significantly higher than in Germany. Economists see this as an indication that the German legislature would have room to adjust without departing from international standards.

Overall, the Federal Statistical Office points out that revenues from inheritance and gift tax are an indicator of wealth distribution. The upcoming budget negotiations between the federal government and the federal states are unlikely to bypass the issue.