Politics · Germany · 1 hr ago
Bavaria challenges national rules on inheritance tax
Germany currently has one set of inheritance tax rules, although the tax revenue goes to the states.
Bavaria has asked the Constitutional Court in Karlsruhe to review whether the federal government has the right to set those rules.
The state is challenging rules on property valuation, tax-free allowances and tax rates.
Bavaria also argues that allowances and rates have not kept pace with inflation and that allowances should reflect regional differences in property prices.
The court is holding a hearing on the case, but a decision is not expected for several months.
The dispute matters because the outcome could affect who sets the tax rules and how much people pay when they inherit.
Germany’s governing coalition agrees the tax needs reform, but its parties differ on when to act, and some want to wait for the court’s decision.
Bavaria is challenging Germany’s national inheritance tax rules at the Federal Constitutional Court in Karlsruhe.
The state argues that the federal government lacks the authority to set rules on property valuations, tax allowances and tax rates.
Bavaria also says allowances and rates have not kept pace with inflation and that allowances should reflect regional property prices.
The court is expected to issue a ruling several months after the hearing.
The court is also due to hear a separate inheritance tax case on Tuesday, concerning tax privileges for business assets.
- Who
- The Bavarian state government is bringing the challenge; the Federal Constitutional Court is hearing it.
- What
- Bavaria is asking whether federal inheritance tax rules are unconstitutional, including because the federal government may lack authority to set them.
- When
- The hearing is scheduled for Monday at 14:00; a ruling is expected several months later.
- Where
- The Federal Constitutional Court in Karlsruhe, Germany.
- Why
- Bavaria says states should have a major role in setting the tax and that allowances and rates have not kept pace with inflation or regional property prices.
This story does not have two clearly opposing sides.
Inheritance tax is a state tax – the revenue goes entirely to the states.
Allowances and tax rates have been unchanged since 2009 – but property prices have in some cases doubled or even tripled.
Bavaria wants children to be able to inherit their parents’ house in the future without inheritance tax forcing them to sell it.
The Federal Constitutional Court is scheduled to hear Bavaria’s challenge to national inheritance tax rules.
The court is due to hear a separate case on tax privileges for heirs to business assets.
The court is expected to issue a ruling.
- Court
- Federal Constitutional Court in Karlsruhe
- Bavarian challenge
- Rules on property valuations, tax allowances and tax rates
- Tax rates
- 7% to 50%
- Tax allowances and rates
- Unchanged since 2009, according to Bavaria’s finance minister
- Inheritance and gift tax revenue
- €13.3 billion in 2025
Sources
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