How does France’s wealth tax affect new arrivals?

Article published on 26 October 2026 in The Local France, in its “Ask the expert” series. Here are the main points.

The IFI in brief

• The real estate wealth tax (IFI) replaced France’s former wealth tax in 2018 and applies only to real estate assets. It is due when the net taxable value of the household’s property exceeds €1.3 million on 1 January, and is then calculated on the portion exceeding €800,000, at progressive rates ranging from 0.5% to 1.5%.
• French tax residents are generally taxed on their real estate assets in France and abroad, while non-residents are generally taxed only on French real estate assets, subject to the applicable tax treaty.
• The tax covers property held directly and property held indirectly through a French or foreign company, including an SCI, to the extent that the value of the company reflects taxable real estate.

The transition period for new arrivals

If you were not a French tax resident during the five calendar years preceding the year in which you become one, only your French real estate assets are taxed until 31 December of the fifth year following that year (article 964 of the French Tax Code). For someone arriving in 2026, only French assets are taken into account on 1 January 2027, 2028, 2029, 2030 and 2031; foreign real estate assets are included from 1 January 2032.

You do not have to apply for this relief, and your nationality and the reason for your move make no difference: it applies to someone who comes to France for a job as much as to someone who comes to retire.

Other points covered

• how the relief interacts with the impatriate tax regime (article 155 B of the French Tax Code), whose eligibility tests are similar but not identical and which generally runs until the end of the eighth year following the start of the job, against the fifth year following the move for the IFI;
• the date on which you become a French tax resident, which starts the transition period, and why it helps to keep a record of the key steps of the move;
• buying a home: the 30% allowance for a main home held directly, which does not apply to shares in an SCI, and the rules on deductible debts, which are tighter for loans from relatives or from a company controlled by the family;
• France’s separate annual 3% tax on the market value of French real estate held through a legal entity;
• reviewing the real estate held abroad around the fifth year, before the transition period ends.