No Electricity Tax Cut in the 2027 Budget

Households in Germany will not get the promised electricity tax cut next year, at least not yet. The budget committee of the Bundestag finished its final round on the 2027 federal budget in the early morning of Friday, 13 November 2026, at around 06:00, and the money for an electricity tax cut was not found. The coalition of CDU/CSU and SPD did settle several other disputes, from a sugar tax to housing benefit.

Why the electricity tax cut is missing

Chancellor Friedrich Merz (CDU) had wanted to lower the Stromsteuer, the electricity tax, for private households. According to Handelsblatt, the coalition partners could not agree how to pay for it, and the cut would cost about 5 billion euros. The Local and t-online put the price at around 5.4 billion euros, which is what it costs to lower the tax to the EU minimum for everyone.

The tax currently stands at 2.05 cents per kilowatt hour, and the EU minimum is 0.1 cents, t-online reports. So far only manufacturers and the farming and forestry sector have received the lower rate. Verivox calculated for t-online that a household would save roughly 3 euros a month if it were a single person with 1,500 kilowatt hours a year, and about 7.75 euros for a family of three with 4,000 kilowatt hours. The Left party leader in the Bundestag, Dietmar Bartsch, called the deal a "slap" from the vice chancellor to the chancellor, because even the promised relief did not arrive, according to taz.

What else changed in the 2027 budget

The Local reports that the plastic packaging tax is off the table for 2027, and Union parliamentary group leader Thorsten Frei declared it dead on ZDF, according to t-online. The planned sugar tax on sweet drinks was also moved. It was due to start on 1 July 2027 and now begins at the start of 2028, in three tiers by sugar content instead of two, says t-online. Our earlier report on the German sugar tax explains the idea.

Several cuts for families and renters were dropped. The planned 300 million euro cut to Wohngeld, the housing benefit for low earners, is cancelled, though t-online notes that no increase is planned for 2027 either. The planned cuts to the Kindersofortzuschlag, an extra child payment for low-income families, are taken back as well, according to t-online. The Local adds that the 25 euro monthly supplement stays but will no longer apply to asylum seekers. Young people aged 16 and 17 keep their Unterhaltsvorschuss, an advance on child maintenance, but an income limit will apply in future. The alcohol tax still rises in January, while sparkling wine is spared.

The numbers behind the budget 2027

The committee approved record federal spending of about 560.9 billion euros, according to The Local and Verkehrsrundschau, which gives the exact figure as 560.92 billion. That is about 5.5 billion euros more than the government's original draft of 555.4 billion. Reports from 12 November still used the lower draft figure of Finance Minister Lars Klingbeil (SPD), so the two numbers describe different stages of the talks and not a real disagreement.

Net new borrowing in the core budget is 122.97 billion euros, up from about 98 billion in 2026, according to taz and Verkehrsrundschau. Including the special funds for infrastructure, climate neutrality and the armed forces, taz puts total new debt at about 210 billion euros. The Greens warned that the budget itself becomes "a major risk for the future", according to taz.

What happens next with the electricity tax cut

The open question goes to the coalition committee, the top round of party leaders, which meets on Tuesday, 17 November. Verkehrsrundschau expects the financing of the electricity tax cut to be a central topic. The Bundestag then starts its final debate on the budget on 24 November and is due to vote on Friday, 27 November. Until then, details can still change, so the figures above are not final.

The 2027 budget is also not the only pressure on household bills. Electricity and gas prices are expected to rise in early 2027, as The Local reported on 11 November, and we explain the details in our guide to energy prices in 2027. Our earlier piece on the final round of the 2027 budget shows how the talks got here.

What the budget deal means for your household bills

If you pay your own electricity bill, plan as if there will be no tax cut on 1 January. A saving of 3 to 8 euros a month was never large, but it would have softened rising grid and energy costs. It is still possible that the coalition committee finds a solution, so watch the news after 17 November.

On the plus side, drinks and everyday shopping will not get a new tax in 2027, and anyone receiving Wohngeld keeps the payment at its current level, though it will not grow with inflation. Families with a low income should watch for a letter from the Familienkasse or the housing office if the final law changes anything. Compare electricity and gas suppliers regularly, since that still brings more savings than the tax cut would have.