How are the inheritance tax classes set?

Germany has three Steuerklassen. Class I covers spouses, registered partners, children, stepchildren, grandchildren, and parents in the case of inheritance. Class II covers siblings, nieces, nephews, in-laws, and divorced spouses. Class III covers everyone else, including unrelated heirs and friends. The class sets both your allowance and your rate band.

What are the personal allowances?

Allowances (persönliche Freibeträge) are 500,000 EUR for a spouse or registered partner, 400,000 EUR per child, 200,000 EUR for a grandchild, 100,000 EUR for parents and grandparents, and 20,000 EUR for siblings, more distant relatives, and unrelated heirs.

What rates apply above the allowance?

Rates are progressive and depend on both the taxable amount and the tax class. Class I runs from 7 to 30 percent, Class II from 15 to 30 percent (raised to 43 percent for the largest estates), and Class III from 30 to 50 percent. The whole taxable amount is taxed at the single band rate it falls into.

Is the family home exempt?

A spouse or registered partner can inherit the family home tax-free if they continue to live in it for at least ten years. Children get the same exemption for a home up to 200 square metres. This calculator does not model the Familienheim exemption; it taxes the value you enter.

Does this cover lifetime gifts?

The same classes, allowances, and rates apply to Schenkungsteuer (gift tax), but the gift allowances refresh every ten years. This tool computes a single inheritance event and does not aggregate prior gifts within the ten-year window.

Germany Inheritance Tax Calculator

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German inheritance tax (Erbschaftsteuer) depends heavily on your relationship to the deceased. Close family enjoy large allowances and low rates; distant or unrelated heirs pay much more. This calculator applies the real classes, allowances, and progressive bands.

How it works

Your relationship sets your tax class and personal allowance. The allowance is subtracted, then the remaining amount is taxed at a single band rate determined by its size and your class:

taxable = max(0, inheritance − personal allowance)
rate    = band rate for (taxable amount, tax class)
tax     = taxable × rate

Unlike a marginal system, German inheritance tax applies one rate to the whole taxable amount, with a smoothing rule near band boundaries to prevent unfair jumps.

Example

A child inherits 600,000 EUR. The 400,000 EUR allowance leaves 200,000 EUR taxable. In Class I, 200,000 EUR falls in the 11 percent band, so the tax is about 22,000 EUR, leaving 578,000 EUR net.

Notes

This is an estimate. It does not model the Familienheim home exemption, the Versorgungsfreibetrag for spouses and children, business-asset relief, or the ten-year aggregation of prior gifts. Everything runs locally in your browser.