Tax Relief and Child Benefits Boost

The recent decision by the Bundestag to implement tax relief and increase child benefits marks a significant financial shift for families. With a combined relief of 7 billion euros in 2025 and 6 billion euros in 2026, this initiative primarily benefits households with children.

Key changes include a higher basic tax allowance, an adjusted solidarity surcharge, and an unchanged wealth tax. Families earning 60,000 euros will see a reduction of 306 euros in tax burdens.

However, the impact will vary across households, and relief measures will only be effective from March, not January. While the government aims to strengthen the economy through these adjustments, challenges remain, including potential losses in tax revenue for federal and local governments.