How high is the allowance for inheritance tax on property?
Anyone who inherits a property is often first confronted with the question of inheritance tax — before it has even been decided whether the property will be kept, let or sold. With the calculator below, an initial estimate of the tax payable can be worked out on the basis of the degree of kinship, the property value and other assets.
Inheritance Tax Calculator
Tax note: Non-binding guidance, without warranty – not a substitute for tax advice.
Tax classes and allowances
The level of inheritance tax depends on the degree of kinship to the deceased. This determines both the personal allowance and the applicable tax class:
| Degree of kinship | Allowance | Tax class |
|---|---|---|
| Spouse / civil partner | 500,000 € | I |
| Children | 400,000 € | I |
| Grandchildren | 200,000 € | I |
| Siblings, nieces, nephews | 20,000 € | II |
| Others / unrelated | 20,000 € | III |
The allowance is deducted from the total value of the estate (the property plus other assets such as bank balances or securities). A tax rate between 7 percent and 50 percent is applied to the remaining taxable amount, depending on the tax class and the level — starting at 7 percent for the first 75,000 € in tax class I, and considerably higher in tax classes II and III.
The family home: inheriting tax-free
An important exception is the family home rule: if spouses, registered civil partners or children inherit a property used by the deceased themselves and continue to live in it for at least ten years, it remains entirely exempt from inheritance tax — and indeed in addition to the personal allowance, regardless of the property's value.
Important: if the property is sold or no longer occupied within those ten years (except for compelling reasons, such as the need for care), the tax exemption can lapse retrospectively.
Property value vs. market value: what counts for the tax office?
To calculate the inheritance tax, the tax office determines its own tax value of the property — generally using the comparison-value or asset-value method. In practice this lump-sum value is often higher than the market value actually achievable, especially for properties with individual defects or a particular location.
If the value set by the tax office appears too high, an independent market-value appraisal can demonstrate a lower, market-appropriate value and thereby noticeably reduce the tax burden. A current valuation provides clarity here — regardless of whether the property is ultimately kept or sold.
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