Essentials
Law : Germany's cabinet approved the Startchancen- und Qualitätsentwicklungsgesetz. It will enforce nationwide quality standards for Kitas. By age four, every child's language and development status must be assessed. Kitas must offer targeted support where language gaps are found. Kitas will also receive extra funding to support this initiative. The federal government is providing €9.25 billion over eight years starting in 2027. [10]
Tax : Payments to the Förderverein are tax-deductible under § 10 Abs. 1 Nr. 9 EStG. This applies when
- the Förderverein passes the money to the school and
- the payment is for the child's attendance.
You can deduct 30% of the amount paid to the Förderverein. [11]
How to save taxes in Germany ->
Tax : You don't need to inform your bank or broker after leaving the church in Germany. The central tax office holds church-membership data, and banks query it automatically before withholding church tax on capital gains. [14]
Everything you must know about capital gains tax in Germany ->
Finance : Germany's 2027 federal budget totals €555.4 billion. This is €31 billion more than in 2026. The planned net new borrowing is €118.7 billion. Here are the key takeaways.
- €118bn in total investment to fund bridges, rail, schools, nurseries, hospitals, fire stations, sports grounds and affordable housing.
- Defense spending will exceed €109bn
- Subsidy cuts to save €3bn in 2027
- The federal pension subsidy will be cut by €1bn in 2027.
- Streamline federal ministries to save €1.2 billion next year. Cross-department savings total €4 billion for 2027.
- Target of 1% annual savings per ministry to save €8 billion per year from 2028.
- Civil-service staffing cuts to save 2% in 2027 and 8% by 2029.
Insurance : Germany's statutory health insurance expenditure grew 7.1% against 4.1% income growth. The main contributors to the higher costs are hospital costs (up 9.3%) and drug costs (up 5.1%). Considering expenditure growth is higher than income growth, you should expect a premium increase in 2027. [3]
If you are unsure between private and public health insurance, consult an insurance broker. You can book a free consultation with the Insurance broker we recommend.
Proposals : The German government proposed creating a federal housing company. The goal is to build affordable housing in regions with housing shortages. [9]
Finance : Smartbroker+* opened pre-registration for a state-subsidized Altersvorsorge-Depot. Account management, savings plans, and deposits are free. ETF running costs are fully reimbursed for the first three years. Smartbroker+ is one of our recommended brokers in Germany.
Best online brokers in Germany ->