The Union wants higher allowances for inheritance tax. The FDP is also open to increasing the amounts from which inheritance tax is due on real estate. In the traffic light coalition, however, a majority for this is currently not in sight.
“We have been discussing within the traffic light coalition for months how we can achieve targeted and socially balanced relief for citizens in times of high inflation, despite an enormously tight budget,” said SPD finance politician Tim Klüssendorf to the Tagesspiegel. “Proposing an increase in the allowances for inheritance tax in this debate does not do justice to the current situation and goes in the completely wrong direction.”
Klüssendorf’s reasoning: “The relief would primarily benefit the wealthiest part of the population.” So those who inherit particularly valuable real estate assets. According to Klüssendorf – responsible for the topic in the SPD parliamentary group – both the inheritance and the real estate transfer tax law already provide for far-reaching simplifications in the transfer of real estate assets.
The relief would primarily benefit the wealthiest part of the population
Tim Klüssendorf, SPD financial politician
“In addition to the personal allowances in inheritance tax law, the transfer of a property of up to 200 square meters of living space to surviving life partners, children or grandchildren is tax-free regardless of its value, if it is then used by yourself,” said Klüssendorf.
For real estate that is not used by the heirs themselves, but rather rented out, the SPD parliamentary group believes that there is no justification for additional privileges. “Such inheritances – like income – increase the ability of the heirs to pay and should not be treated any differently than the transfer of other assets,” emphasized Klüssendorf.
The federal government is currently implementing a requirement of the Federal Constitutional Court, according to which real estate must in future be assessed for inheritance tax according to the current market value. Not least because of the explosion in real estate prices in recent years, this will often lead to higher inheritance tax if the property is not used by the heirs themselves.
Merz speaks of tax increases
CDU/CSU parliamentary group leader Friedrich Merz is therefore also demanding higher allowances. “The traffic light is planning a significant tax increase for inheritances and gifts. All types of real estate are affected: apartments, houses and land,” Merz told the Tagesspiegel. Federal Finance Minister Christian Lindner (FDP) also believes that this is necessary, but does not want to make any move on the grounds that it is a state tax. Bavaria has already announced an initiative in the Bundesrat.
Klüssendorf considers a further reform of the inheritance tax to be appropriate. He calls for “corrections to the excessive protection of business assets”. The federal government’s subsidy report puts the loss of income due to the privilege of business assets in inheritance tax law for 2020 at 6.8 billion euros. “It is therefore the largest tax subsidy and can no longer be justified on this scale. That is why we continue to work to abolish the overprivileging of large business assets with effective minimum taxation.”
The call for a fundamental reform also joined the Greens parliamentary group deputy Katharina Beck on Wednesday. “Inheritances are effectively taxed at only two percent on average,” she said in the Tagesspiegel. “There are extremely many exceptions, especially for very large inheritances. It can make sense to talk about a fundamental reform of the inheritance tax.”
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