Higher real estate prices, and then higher inheritance taxes? Scandal? Not exactly.
But first, some facts. Real estate prices have risen dramatically in recent years. In some places, the plus was one hundred percent and more. Everyone who inherits a house or apartment notices this. Earlier with the size of the inheritance, but soon with the inheritance tax.
Because the coalition of traffic lights is now implementing the requirement of the Federal Constitutional Court, according to which real estate must also be recognized according to the inheritance tax market, that is, according to the current market value.
The limits are quite high
With that they will be price increasen is usually fully penetrating. This means that significantly more bequests exceed the applicable tax-free allowance than before. For spouses – 500,000 euros, for children – 400,000, for grandchildren – 200,000 euros.
As a result, inheritance tax is often higher. Example: An only child inherits a well-located parents’ house worth €650,000 due to the explosion of property prices. So far, it has only been valued at €500,000. The child does not use the property himself. Previously, the inheritance tax would have been EUR 11,000. Now it would be 37,500 euros.
Is this really such a big audacity that benefits should be increased now? Especially since the inheritance is tax-free if you use it yourself. Inheritance is unearned income. In the case of residential real estate, heirs often contributed little or nothing to the increase in value. Over the years, they have watched the market value of their inheritance rise, but not the tax valuation.
This is a question of justice. And it’s not just about the huge disparity between the very rich and the very poor. This is a problem in the broad social center that opens up here.
Those who inherit properties in good locations suddenly become much richer. In bad situations, the profits are not so great anymore. Whoever does not inherit or gets an unsold booth is out of luck.
Has it been like this forever? That’s right. But given the asset price bubble of recent years, that gap is widening. Happiness is distributed selectively. Given the reasonable increase in inheritance tax, it is hard to see how to talk about an additional burden if taxation is now based on market value. And then it is completely strange to talk about raising taxes.
Just a little more justice here. Therefore, the allowances can remain as they are. Whoever then pays more taxes than before has really no reason to complain.