Federal Constitutional Court reviews German inheritance tax rules

The German Federal Constitutional Court is reviewing central inheritance tax regulations following an application for abstract judicial review by the state of Bavaria. The legal challenge targets the valuation of real estate, personal tax exemptions, and applicable tax rates.

Bavaria argues that the current framework may be unconstitutional, specifically noting that existing tax exemptions and rates do not sufficiently account for significant increases in property prices and regional market differences. While the tax-free allowance for a primary family home is not part of this specific proceeding, the court will examine whether the federal government has the authority to regulate these points uniformly.

A hearing is scheduled for October 12, though a final ruling is not expected immediately.