PPolitically, Bavaria failed in the dispute over the reform of inheritance tax. Now the state government wants to go before the Federal Constitutional Court in Karlsruhe. On the one hand, the Söder government is concerned with increasing the inheritance tax allowances, “which must take into account the sometimes massive increases in value of single-family homes”. On the other hand, Bavaria is fighting for a regionalization of the inheritance tax: Since the states are entitled to the revenue from the inheritance tax, it is “only logical to reserve the last decision on the amount of the allowances and other core elements of the tax to the state parliaments”.
For FDP politicians, the announced trip to Karlsruhe is a “klamauk” or a “PR campaign”. The Heidelberg constitutional and tax law professor Ekkehart Reimer sees a need for constitutional clarification in some points. The reason for this is the – in an international comparison – unusual construction of the German financial constitution. The income from the inheritance tax goes to the federal states, but the federal government determines the legal structure. That almost inevitably leads to conflicts, says Reimer in an interview with the FAZ
In Bavaria there is also a special feature: “The inheritance tax also serves the purpose of preventing the accumulation of huge fortunes in the hands of individuals,” says the state constitution. “Bavaria is therefore obliged not to lose sight of the steering purpose of inheritance tax,” explains Reimer. For federal legislation, on the other hand, the Basic Law alone is the yardstick.
“He who inherits a lot can also pay a lot”
Whether the new valuation rules for real estate are in line with the Basic Law can be measured using the principle of economic efficiency, which is derived from the general principle of equality. According to this, if you inherit a lot, you can also pay a lot. However, if the burden of payment is so high that heirs have to sell, the fundamentally protected right of inheritance is also affected, explains Reimer. If the family home is inherited, the tax legislator must also observe the protection of fundamental rights for the family. It becomes even more tricky if the heir lives in the family home and the tax burden is now so high that he has to sell and move out. Bavaria cites this scenario as the reason why the new assessment rules are unacceptable.
But legislators have taken precautions to avoid such hardships, most notably through exemptions from inheritance tax for spouses and children. If these exemptions do not apply, there is the possibility of an interest-free deferral. “I don’t see that the new regulations on inheritance tax could force anyone to make an emergency sale,” concludes Ulm legal scholar Heribert Anzinger.
Bavaria wants to decide for itself on exemptions
From a Bavarian point of view, the current regulations are also unacceptable because regional characteristics are not sufficiently taken into account. Since the market values of real estate in Germany have developed very differently, it is “urgent” that it is no longer the federal government but the states themselves that decide on core elements of inheritance tax, such as tax exemptions.
In 2014, the Federal Constitutional Court decided – without being asked – that the federal government was responsible for inheritance tax, and justified this with the “preservation of the legal or economic unit”. However, Reimer points out that since then there have been constitutional changes to the property tax, combined with new leeway for the countries, which have also eagerly used them. According to Reimer, this “increase in experience” would give reason to take another close look at whether the arguments of the Federal Constitutional Court in favor of federal responsibility could still be convincing with regard to the valuation of real estate.