German Gift Tax Calculator 2026

German Gift Tax: A Comprehensive Guide for Expats

Germany levies a tax on significant gifts under the Erbschaftsteuer- und Schenkungsteuergesetz (ErbStG) -- the Inheritance and Gift Tax Act. Unlike many English-speaking countries where gift tax is primarily the donor's responsibility, in Germany the recipient (Beschenkter) is the primary taxpayer, though the donor is jointly liable.

For expats living in Germany, understanding gift tax is essential in several scenarios: receiving money from family abroad, transferring assets between spouses, giving to children, or receiving gifts related to real estate. Germany's gift tax has broad reach -- it applies whenever either the donor or the recipient is a German tax resident, and in some cases even extends to non-residents transferring German-situs assets.

Tax-Free Allowances by Relationship (Section 16 ErbStG)

The personal allowances form the cornerstone of gift tax planning in Germany. They are generous for close family members and much smaller for distant relatives and unrelated persons:

A critical detail: these allowances apply per donor. A child can receive 400,000 EUR from each parent tax-free, and the allowances renew every 10 years. This means a married couple can transfer 800,000 EUR to each child every 10 years without any gift tax.

The 10-Year Rule: Strategic Gift Planning

The 10-year aggregation rule (Section 14 ErbStG) is the most important concept in German gift tax planning. All gifts from the same donor to the same recipient within a rolling 10-year window are cumulated. The allowance applies to this cumulative total.

After 10 years from the first gift, the earliest gift "drops off" the aggregation window, and the allowance effectively renews. This creates opportunities for systematic wealth transfer:

• Year 1: Parent gifts 400,000 EUR to child (within allowance, no tax)
• Year 11: Parent can gift another 400,000 EUR (allowance has renewed)
• Year 21: Another 400,000 EUR possible

Over three decades, a married couple can transfer 2.4 million EUR to a single child completely tax-free through this mechanism (400,000 per parent, three 10-year cycles).

Gift Tax Rates by Tax Class

For amounts exceeding the allowance, the following progressive rates apply:

Note that in Tax Class III (unrelated persons), the rate is a flat 30% for amounts up to 6,000,000 EUR and jumps to 50% above 13,000,000 EUR. For expats receiving gifts from unrelated persons (such as domestic partners who are not registered civil partners), even relatively modest gifts above 20,000 EUR face a 30% tax rate.

When German Gift Tax Applies to Expats

German gift tax has a broad territorial scope under Section 2 ErbStG:

Unlimited Tax Liability (unbeschraenkte Steuerpflicht)

All worldwide assets are subject to German gift tax if either the donor or the recipient is a German tax resident (having a domicile or habitual residence in Germany). As an expat living in Germany, you are generally a tax resident. This means:

• Gifts from your parents abroad to you in Germany: subject to German gift tax on the full amount
• Gifts from you to family abroad: also subject to German gift tax
• Foreign real estate, bank accounts, securities: all included

Extended Unlimited Tax Liability

German citizens who leave Germany remain subject to unlimited gift tax liability for up to 10 years after departure (or 5 years for those who were not German citizens). For expats who acquired German citizenship, this extended liability is an important consideration when planning to return to their home country.

Limited Tax Liability

When neither donor nor recipient is a German resident, German gift tax still applies to German-situs assets (inlaendisches Vermoegen), particularly real estate in Germany and shares in German partnerships.

Avoiding Double Gift Taxation

Germany has very few double taxation agreements specifically covering gift and inheritance tax (notably with Denmark, France, Greece, Sweden, Switzerland, and the USA). For transfers involving countries without such agreements, unilateral relief under Section 21 ErbStG may apply: foreign gift or inheritance tax paid on foreign assets can be credited against German tax, but only for assets located in the foreign country.

For expats from countries without a bilateral agreement, this can create complex situations where both countries tax the same gift. Professional advice from a tax advisor specializing in international succession law is strongly recommended.

Reporting Requirements

Under Section 30 ErbStG, gifts must be reported to the tax office within three months of the gift being made. Both the donor and the recipient are obligated to report. Banks and financial institutions are also required to report transfers in certain circumstances.

Even gifts that fall within the tax-free allowance should technically be reported, though many small gifts within families go unreported in practice. However, for significant transfers, particularly involving real estate, formal reporting and often notarization are required.

Practical Examples for Expats

Example 1: Parents Abroad Gift Money to Expat Child in Germany

Your parents in India transfer 50,000 EUR to you in Germany:

• Allowance per parent: 400,000 EUR (Tax Class I)
• Tax due: 0 EUR (within the allowance)
• Note: This gift uses 50,000 EUR of the 400,000 EUR allowance for the next 10 years

Example 2: Unmarried Partner Gifts Property

Your unmarried partner (not a registered civil partner) gifts you their share of a jointly purchased apartment valued at 150,000 EUR:

• Allowance: 20,000 EUR (Tax Class III -- unrelated persons)
• Taxable amount: 130,000 EUR
• Tax rate: 30%
• Gift tax due: 39,000 EUR

This example illustrates why unmarried partners should consider registering a civil partnership (eingetragene Lebenspartnerschaft) or marrying, which would increase the allowance from 20,000 to 500,000 EUR and reduce the tax class from III to I.

Example 3: Strategic Giving to Children Over Time

An expat couple wants to transfer 1,600,000 EUR to their two children:

• Each parent gives each child 400,000 EUR (= 4 x 400,000 = 1,600,000 total)
• All amounts within the respective allowances
• Total gift tax: 0 EUR
• In 10 years, the entire process can be repeated

Special Exemptions

• Family home (Familienheim): Transfer of the family home between spouses is completely tax-free, regardless of value, provided the recipient continues to live in the property (Section 13(1) No. 4a ErbStG).
• Household items: An additional allowance of 41,000 EUR for Tax Class I recipients covers household items, furniture, and personal effects.
• Maintenance gifts: Regular gifts for living expenses (Unterhalt) that are customary and appropriate are not subject to gift tax.
• Occasional gifts: Birthday, wedding, and holiday gifts that are customary in amount are generally exempt.

Tips for Expats on Gift Tax Planning

• Start early: The 10-year cycle means earlier planning allows more tax-free transfers over your lifetime.
• Consider both parents as donors: Each parent has a separate allowance, so both should participate in gift planning.
• Document all gifts: Keep records of every significant transfer, including the date, amount, and relationship. This is essential for the 10-year aggregation calculation.
• Check bilateral agreements: If your home country has a gift tax treaty with Germany, the rules may differ from the general provisions.
• Consider the family home exemption: Transferring property used as the family home between spouses can be done tax-free at any value.
• Plan around the 10-year window: If you are approaching the end of a 10-year cycle, waiting a few months before making an additional gift can save significant tax.