Thinking about giving or receiving a large gift in Germany? Whether it’s money, real estate, or valuable items — the German tax office may want a share. In this guide, you’ll learn when gift tax applies, how much you might pay, how to reduce it legally, and what freelancers and the self-employed should know.
🎁 What is gift tax and when does it apply?
Gift tax (Schenkungssteuer) in Germany applies when you give or receive something of value — such as money, real estate, or other assets — without expecting anything in return. This includes:
Large cash transfers between family members
Gifts of business shares or property
Transferring assets to a spouse, partner, or friend
Jewelry, art, or other valuable property
Germany treats large gifts almost like inheritances. This means they are taxable if they go above a certain threshold (called a tax-free allowance or Freibetrag). These limits depend on your relationship with the person giving or receiving the gift.
How much can you give or receive tax-free in Germany?
😤 You don’t have to pay gift tax on every gift. Germany offers generous tax-free allowances, which depend on how you are related to the other person. You can use these allowances once every 10 years.
Relationship | Tax-free allowance (EUR) |
|---|---|
Spouse or registered partner | €500,000 |
Child, stepchild, adopted child | €400,000 |
Grandchild | €200,000 |
Parent or grandparent (receiving a gift from a child) | €20,000 |
Sibling, niece, nephew, in-law, ex-spouse, friend | €20,000 |
✍️ Example: A parent can gift up to €400,000 to their child tax-free every 10 years. After 10 years, they can give the same amount again — also tax-free.
What are the tax rates on gifts above the allowance?
If the gift value exceeds the tax-free amount, the extra portion is taxed. The rate depends on two things:
Your relationship (called a “tax class”)
How much the extra value is
Value over allowance | Class I (e.g. child, spouse) | Class II (e.g. sibling) | Class III (e.g. friend) |
|---|---|---|---|
Up to €75,000 | 7% | 15% | 30% |
€75,001 – €300,000 | 11% | 20% | 30% |
€300,001 – €600,000 | 15% | 25% | 30% |
€600,001 – €6,000,000 | 19% | 30% | 50% |
Over €6,000,000 | 23% – 27% | 35% – 43% | 50% |
🧮 Example Calculation: You give your daughter €600,000. Her allowance is €400,000, so €200,000 is taxable.
Tax class I rate for that amount: 11% → €22,000 gift tax.
🌍 What if you give or receive a gift internationally?
If either the giver or the recipient lives in Germany, the gift is usually taxable — even if the asset is abroad or comes from a third-party country.
This is especially important for freelancers and self-employed individuals who:
Receive gifts from abroad (e.g. family support)
Own international real estate or business shares
Work with clients or partners outside the EU
✅ Norman automatically applies the correct tax rules (including VAT for business transactions) and helps you stay compliant with German tax authorities. You won’t need to figure out international tax rules alone.
What happens if you gift real estate or a business?
Some gifts are harder to value — like a house or a business. Here’s what you need to know:
Primary homes can be gifted tax-free to spouses and children — if they live there for 10+ years
Rental properties are taxed based on market value
Business shares can be transferred tax-free under special rules — but the business must be kept running for several years
Do you have to report the gift to the tax office?
Yes. If the gift exceeds the allowance or has a high value (like property), it must be reported to the Finanzamt within 3 months.
How to report:
Online via ELSTER portal
Through a tax advisor
Penalties apply if you don’t report on time — even if no tax is due.
😌 Pro tip: File your gift taxes stress-free with Norman’s modern tax advisory service for freelancers and the self-employed.
Tips to avoid or reduce gift tax in Germany
✅ Use the 10-year allowance cycle to plan large gifts
✅ Break big gifts into smaller ones over time
✅ Consider gifting to multiple people (e.g. spouse first, then children)
✅ Add a “usufruct” clause when gifting property — this lowers its taxable value
Final thoughts
Gift tax in Germany is manageable — if you understand the rules and plan ahead. As a freelancer or self-employed person, you may need to transfer assets or receive financial support from abroad.
Frequently asked questions (FAQ)
Q: Do I have to pay gift tax for a €50,000 gift from my parents?
A: If it’s your only gift from them in 10 years, and you haven’t used the €400,000 allowance — no tax is due.
Q: Can a gift from abroad be taxed in Germany?
A: Yes — if you live in Germany, even foreign gifts can be taxable.
Q: Do gifts include VAT?
A: No. Gifts are not subject to VAT, unless they’re business payments.
Q: Can I avoid gift tax completely?
A: Not always — but with smart planning and tools like Norman, you can reduce or avoid it legally.