Inheritance and gift tax reaches record high

According to the Federal Statistical Office in Wiesbaden, inheritance and gift taxes totaling €13.3 billion were levied in 2024. The total was 12.3 percent higher than the previous year, thus reaching a new record high.

The statistics do not say anything about the actual transfer of assets, since most inheritances and gifts fall within the tax-free allowances and are not recorded in the tax statistics.

Of the assessed taxes, €8.5 billion was attributable to inheritances—9.5 percent more than in the previous year. After reaching a peak of €9.0 billion in 2021, inheritance tax fell in the following years and rose again for the first time in 2024.

The assessed gift tax reached a new high of €4.8 billion in 2024, rising by 17.8 percent compared to the previous year. "It has thus been rising continuously since 2019 and has more than doubled since 2021," the statisticians report. This is also an indication that more and more wealth is being transferred during one's lifetime through gifts in order to benefit multiple times from tax allowances and reduce the tax burden.

The tax assessments were based on asset transfers through inheritances and gifts totaling €113.2 billion. This amount was 6.8 percent lower than the previous year. According to the Federal Statistical Office, this is due, among other things, to lower asset transfers of business assets, which were almost a quarter lower.

An alliance of the Tax Justice Network, the citizens' movement Finanzwende, and the Taxmenow initiative is calling for the abolition of inheritance tax exemptions for the wealthy. The alliance launched a campaign on Thursday titled "Inheritance Tax: A Matter of Honor: No Exemptions for Billionaires."

The taxation of inheritances in Germany is "neither efficient nor fair," explained Julia Jirmann of the Tax Justice Network. "While medium-sized inheritances are taxed more heavily, heirs of multimillion- and billion-dollar estates pay only a fraction thanks to numerous privileges and loopholes."

According to the Federal Statistical Office, tax relief is among the “largest deductions in terms of value” when calculating inheritance and gift tax.

Citing data from the Federal Statistical Office, the alliance of organizations stated that 45 large heirs were exempted from inheritance or gift tax in 2024. Assets totaling approximately €12 billion were transferred. The tax authorities initially assessed €3.5 billion in taxes on these assets – but according to the Tax Justice Network, around 95 percent of this was subsequently exempted. The heirs effectively paid only around €130 million, or about 1.5 percent.

In total, the state forwent revenues amounting to €3.4 billion, which was €1.3 billion more than in 2023.

Jirmann from the Tax Justice Network criticized: "In times when every subsidy and every social benefit is carefully scrutinized, this form of injustice must not continue – it would simply be poison for social cohesion."

Finanzwende board member Gerhard Schick explained that in recent years, "the persistent injustice of the current form of inheritance tax has been made known far into the political center." Now, the time has come to have an honest and serious debate about it.

"It's not a question of whether to raise taxes or not," Schick explained. "It's a question of decency, whether the wealthiest families in this country can continue to avoid paying a fair share of government funding."