Inheritance and gift tax set to reach new high of 21.4 billion euros in 2025

BERLIN, 26 AUGUST 2026 —

Germany’s Inheritance and Gift Tax Hits Record €21.4 Billion in 2025 as Large Transfers Surge

The Federal Statistical Office (Destatis) said the increase was driven by a 146.8% jump in tax levied on large transfers of at least €20 million, underscoring a broader trend of rising wealth transfers among Germany’s affluent households. The data reflects only taxable transfers where inheritance or gift tax was assessed; most transfers fall below tax-free thresholds and are not included in the statistics.

Tax Revenue Breakdown and Trends Inheritance tax alone accounted for €13.3 billion in 2025, up 57.1% from the prior year and surpassing the previous peak of €9.0 billion set in 2021. After declines in 2022 and 2023, the tax rebounded in 2024 and accelerated further in 2025. Gift tax also hit a record €8.1 billion, rising 67.3% year-on-year and nearly doubling since 2019, when it stood at €1.2 billion.

Total wealth transferred through inheritance and gifts reached €141.1 billion in 2025, a 23.1% increase from 2024. The rise was broad-based, with significant increases in business assets, capital shares, and real estate. Transfers of business assets rose 19.0% to €25.6 billion, including a 14.1% increase in large transfers over €26 million, which reached €9.8 billion. Capital shares saw a dramatic 128.9% surge to €16.8 billion, while real estate transfers climbed 11.2% to €51.6 billion.

Other assets, including bank deposits and securities, rose 19.7% to €45.3 billion, and agricultural land increased 15.7% to €1.8 billion.

After accounting for liabilities and other acquisitions such as legacies and contractual claims, the taxable wealth totaled €150.5 billion, up 32.9% from 2024.

Inheritance vs. Gifts: Diverging Patterns Inheritance transfers totaled €77.9 billion in 2025, an 18.1% increase, with capital shares rising 71.8% to €3.2 billion and real estate up 20.3% to €33.0 billion. However, inherited business assets fell 8.8% to €4.4 billion, including a 58.9% drop in large transfers over €26 million to €0.5 billion. After adjustments, taxable inherited wealth reached €87.3 billion, up 36.2%.

Gift transfers rose 28.7% to €63.2 billion, rebounding after a dip in 2024. Capital shares surged 148.4% to €13.6 billion, and gifted business assets increased 27.0% to €21.2 billion, including a 26.3% rise in large transfers to €9.3 billion. Gifted real estate, however, declined 2.1% to €18.6 billion, while other assets and agricultural land rose 32.3% and 18.0%, respectively.

Tax Relief and Policy Context The statistics do not include tax waivers granted under the relief needs assessment (§28a ErbStG), which totaled €3.7 billion in 2025—an increase of 9.9% from 2024. Of this, €3.4 billion was waived on gifts and €0.3 billion on inheritances.

Most wealth transfers in Germany remain below tax-free allowances and are not subject to tax, meaning the reported figures represent only a fraction of total intergenerational wealth flows. The data is compiled annually by tax authorities and published with a delay, as final tax revenues are recognized only after assessments are completed.

Regional and Global Implications The surge in high-value transfers reflects broader demographic and economic trends in Germany, including an aging population and rising asset values. It also highlights the growing role of intergenerational wealth planning, particularly among business owners and high-net-worth individuals.

For Malaysia, where inheritance laws and tax policies differ, the German experience offers a comparative case study on how large wealth transfers can impact public finances. While Malaysia does not levy inheritance tax, the country has seen increased attention on estate planning, particularly among the Chinese and Indian communities, where family businesses and property are significant wealth components.

Economists note that Germany’s rising tax take from inheritance and gifts could inform debates on wealth inequality and fiscal sustainability in aging societies. However, the absence of such taxes in Malaysia means the country relies more on other revenue streams, such as real property gains tax and stamp duties.

Stakeholder and Expert Views A spokesperson for Destatis emphasized that the data reflects only taxable transfers and does not capture the full scope of wealth transmission in Germany. “Most transfers occur within tax-free thresholds, so the actual volume of wealth passed down annually is much higher,” the spokesperson said.

Tax policy analysts in Berlin pointed to the sharp rise in large transfers as evidence of concentrated wealth growth. “The doubling of tax on transfers over €20 million suggests that a small number of very high-value estates are driving the increase,” said an economist at the German Institute for Economic Research (DIW Berlin).

Meanwhile, business associations have raised concerns about the impact of inheritance tax on family-owned enterprises. “High tax burdens on business transfers can discourage succession planning and threaten long-term business continuity,” said a representative of the German Family Business Association.

Looking Ahead With Germany’s population aging and asset values continuing to rise, inheritance and gift tax revenues are expected to remain elevated in the coming years. The government has not signaled any immediate changes to the tax framework, though debates on wealth taxation persist amid broader discussions on fiscal equity.

For Malaysia, the German case underscores the potential revenue and policy implications of managing large intergenerational wealth transfers, even in the absence of direct inheritance taxes. As Malaysia’s middle class expands and property ownership grows, estate planning and wealth preservation strategies are likely to gain prominence among families and policymakers alike.

Further details and methodological notes are available in the Destatis report “Statistics on Inheritance and Gift Tax 2025,” with long-term data accessible via the GENESIS-Online database.

Related: Federal Statistical Office (Destatis) · Berlin