Calculate German gift tax. Same rates as inheritance tax, with allowances that renew every 10 years.
The personal allowance renews every 10 years. Strategic gifting over multiple decades can transfer significant wealth tax-free.
How does German gift tax differ from inheritance tax?
Gift tax (Schenkungsteuer) and inheritance tax (Erbschaftsteuer) use the same tax rates, tax classes, and personal allowances. The key difference is that gift tax allowances renew every 10 years, allowing tax-efficient wealth transfer through planned gifting over time.
How does the 10-year renewal period work?
All gifts from the same person within a 10-year window are aggregated. Once 10 years have passed since a gift, it no longer counts toward the current allowance. For example, a parent can gift EUR 400,000 to a child, wait 10 years, and gift another EUR 400,000 completely tax-free.
Must gifts be reported to the tax office?
Yes. Both the donor and the recipient must notify the Finanzamt of any gift within 3 months. This applies even if the gift is within the allowance and no tax is due. The notification is required under section 30 ErbStG. Banks automatically report certain financial gifts.
Disclaimer: These calculations are estimates based on 2025 German tax rules and should not be considered professional tax advice. Consult a Steuerberater for your specific situation.
Tax-free allowances, rates, and how gifts between family members are taxed
How much can you gift tax-free in Germany?
The tax-free allowance depends on your relationship to the recipient. Spouses can give €500,000 tax-free. Parents to children: €400,000. Grandparents to grandchildren: €200,000. Siblings, nieces, nephews: €20,000. Unrelated people: €20,000. These allowances reset every 10 years, so you can give €400,000 to your child every decade tax-free.
What are the gift tax rates?
Gift tax rates range from 7% to 50% depending on the amount above the allowance and the relationship. For children (tax class I), rates go from 7% on the first €75,000 above the allowance to 30% on amounts above €26 million. For unrelated people (tax class III), rates start at 30% and go up to 50%. A gift of €600,000 to a child triggers tax on €200,000 at 11% = €22,000.
Do you need to report gifts to the Finanzamt?
Yes, both the giver and receiver must report any gift to the Finanzamt within three months, even if it is below the tax-free allowance. The report goes to the Erbschaftsteuerstelle (inheritance tax office). Gifts through a notary are reported automatically. Not reporting a gift can lead to fines and interest if the Finanzamt discovers it later.
How does the 10-year rule work for gifts?
All gifts from the same person within a 10-year window are added together. If a parent gives a child €200,000 now and another €200,000 in 5 years, the total is €400,000 — exactly at the allowance. But if they give another €100,000 in year 8, the total becomes €500,000 and the €100,000 excess is taxed at 11% = €11,000.
Can you gift property tax-efficiently?
Yes, property gifts can be tax-efficient because the Finanzamt values property using a formula that often gives a value below market price. The Bedarfswert (assessed value) can be 20% to 40% lower than the real market value. A property worth €600,000 on the market might be assessed at €450,000 for gift tax purposes, significantly reducing the tax bill.
What is a Kettenschenkung?
A Kettenschenkung (chain gift) is when you gift through an intermediate person to use multiple allowances. For example, instead of giving €600,000 directly to your grandchild (€200,000 allowance), you give €400,000 to your child (tax-free) who then gives it to the grandchild (€400,000 parent-to-child allowance). The Finanzamt may challenge this if the intermediate person does not genuinely receive the gift.
Bundesfinanzministerium-Aligned: Based on 2025 Bundesfinanzministerium rates and thresholds. For personal advice, speak to a qualified Steuerberater (tax adviser).
Disclaimer: This calculator provides estimates based on current German tax rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms