Real estate wealth tax (IFI)
Art. 964 et seq. CGI
The real estate wealth tax (IFI) is an annual tax on net real estate assets, due when their value on 1 January exceeds €1.3 million (art. 964 CGI).
Please note.This definition is deliberately simplified. It does not constitute legal or tax advice. The exact conditions, thresholds, rates and periods depend on your situation and on the regulations in force.
Which text applies?
- Art. 964 CGI : Establishes the IFI, sets the €1,300,000 threshold and defines its scope according to tax domicile, with a specific regime for new residents.
- Art. 965 CGI : Defines the tax base: real estate assets and rights held directly, and shares in companies to the extent of the portion of their value representing such assets.
- Art. 977 CGI : Sets the progressive scale from 0.5% to 1.5% and the relief applicable between €1.3 and €1.4 million.
Who is liable to the IFI?
Persons domiciled in France are taxable on their real estate located in France and outside France. Non-residents are taxable only on their real estate assets and rights located in France, including those held through companies. Persons who were not domiciled in France during the five calendar years preceding their arrival are taxable only on their assets located in France until 31 December of the fifth year following the year of their arrival.
Which assets and which debts are taken into account?
From the IFI due on 1 January 2027, shares in companies are exempt to the extent of the portion representing real estate subject to the new tax on the non-operating assets of personal holding companies (art. 235 ter C). This tax is among the provisions of the 2026 Finance Act referred to the Conseil constitutionnel.
- valuation on 1 January under the rules applicable to inheritance tax, with a 30% allowance on the main residence;
- deduction of debts existing on 1 January and relating to taxable assets; above €5 million of assets, the portion of debts exceeding 60% of their value is deductible only up to 50%;
- exemption of assets used for the main professional activity, including through companies, under the conditions of articles 975 et seq.;
- cap: the IFI and the taxes on the previous year’s income may not exceed 75% of that income.
How is the IFI declared and audited?
Assets are declared on schedule no. 2042-IFI, together with the income tax return. Shares in property-holding non-trading companies (SCI) are not valued as a simple proportion of the building: the company’s financial position and the restrictions affecting the shares are taken into account, and the value retained must be capable of being justified in the event of an audit.
How does the rule apply? A worked example
A main residence and a let flat
Illustrative example: a couple resident in France holds on 1 January their main residence, valued at €1,200,000, and a let flat worth €900,000, financed by a loan with €200,000 still outstanding.
As the net taxable assets exceed €1,400,000, no relief applies.
- Main residence after the 30% allowance
- €840,000
- Let flat
- €900,000
- Loan outstanding
- − €200,000
- Net taxable assets
- €1,540,000
- Band from €800,000 to €1,300,000 at 0.5%
- €2,500
- Band from €1,300,000 to €1,540,000 at 0.7%
- €1,680
- IFI due
- €4,180
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