Inheritance tax covers assets acquired upon death. The taxation of your increased ability to pay is intended to contribute to a fairer distribution of assets. Inheritance tax does not apply to the estate as such, but to the inheritance received by the individual acquirer.

The object of taxation is the acquisition by reason of death. Acquisition by reason of death is deemed to be

• acquisition by inheritance, by legacy or on the basis of an asserted claim to a compulsory portion
• acquisition by way of a gift on death
• other acquisitions to which the provisions of civil law applicable to legacies apply
• acquisition on the basis of a contract concluded by the deceased which is acquired directly by a third party upon death (e.g. life insurance contract)

The basis of assessment for the tax is the taxable acquisition. The taxable acquisition is the enrichment of the acquirer, unless it is tax-free. The assets transferred are valued in accordance with the Valuation Act.

The valuation of real property is of particular importance. Property values are determined by the tax offices in a separate procedure if required. The basis is the fair market value of the land. Various valuation methods exist to determine the fair market value.

Deductible liabilities include all debts that have been transferred from the testator to the heirs. In addition, legacies, conditions and compulsory portion claims can be deducted. Funeral costs, grave care costs and estate settlement costs incurred as a result of the inheritance are also deductible. To cover the latter costs, you can deduct a lump sum of EUR 10,300 (EUR 15,000 for acquisitions from 2025) without providing proof.

The tax class is also decisive for the amount of tax. This is because the tax bracket affects the amount of your personal tax rate and tax-free allowance. Basically, the closer you are related to the deceased, the more sparingly inheritance tax applies.

The amount of tax also depends on whether any material tax exemptions have to be taken into account. Of particular importance from the list of exemptions are the allowance for household effects of EUR 41,000 for purchasers in tax class I, the allowance for other movable tangible property of EUR 12,000 for purchasers in tax class I, and the allowance of EUR 12,000 for household effects and other property combined for purchasers in tax classes II and III. The acquisition of a family home is also tax-free in many cases.

The Inheritance Tax Act also provides for various tax exemption options for the acquisition of business assets and shareholdings as well as agricultural and forestry assets that qualify for preferential treatment.