Limits on tax privileges, not regional rules
The finance ministries of Bremen, Hamburg, Mecklenburg-Western Pomerania, Lower Saxony and Schleswig-Holstein outlined their position after the meeting, dpa-AFX reported.
Bremen Finance Senator Björn Fecker of the Greens criticized arrangements that often allow very large fortunes to pass to heirs almost tax-free while smaller inheritances are taxed. He said those with the greatest wealth should contribute more to prevent inequality from worsening, arguing that tax-planning opportunities could be restricted without putting companies or jobs at risk.
Schleswig-Holstein Finance Minister Silke Schneider, also a Green, linked a fairer inheritance tax to stronger state revenues and closing tax loopholes. Lower Saxony Finance Minister Gerald Heere of the Greens called for limits on excessive privileges for large business assets, fewer loopholes and greater harmonization.
The CDU/CSU and SPD agree within the federal coalition that inheritance tax needs reform, but differ over the changes. Bavarian Minister-President Markus Söder of the CSU wants to regionalize the tax. The five northern states oppose that approach, warning it would bring ruinous tax competition among states and additional bureaucracy.
Court ruling could set the basis for reform
The northern finance ministries said a pending Federal Constitutional Court decision could clarify the legal position and should provide the basis for tackling reform.
On October 13, 2026, the court's First Senate held an oral hearing in case 1 BvR 804/22 on whether inheritance tax relief for business assets complies with Germany's Basic Law.
The constitutional complaint was brought by a man who inherited only private assets from his aunt, including a securities portfolio and real estate. He argues that the rules unconstitutionally disadvantage him compared with heirs who receive business assets eligible for preferential treatment.
Record assessments and billions in relief
Germany sets inheritance tax rules nationally, but the revenue goes entirely to the states and is an important source of funding for their budgets.
According to Federal Statistical Office figures reported on August 26, 2026, tax authorities assessed 21.4 billion euros in inheritance and gift tax for 2025. That was a record, up 60.8% from the previous year. The value of assets transferred totaled 141.1 billion euros.
Separately, 3.7 billion euros in business-asset taxes were waived in 2025 under the relief-needs assessment known as the Verschonungsbedarfsprüfung.
Emergency borrowing, crypto gains and payment rules
The five states also called for a change to Germany's debt brake that would allow emergency borrowing to extend beyond a single budget year during crises. They backed the planned taxation of cryptocurrency gains at a rate no lower than the 25% capital gains tax rate.
At the fifth North Finance Ministers' Conference on October 28, 2026, the states also supported mandatory electronic cash registers to combat tax evasion. They discussed whether the requirement should begin at 100,000 euros in turnover or apply at a lower threshold, and agreed that customers should be offered a digital payment option.
