French Property Wealth Tax (IFI) for Non-Residents

France taxes property wealth, and it can reach you even after you have left. The IFI (impôt sur la fortune immobilière) falls on real estate above a threshold of €1.3 million, worldwide for residents, but French property only for non-residents and impatriates. Owning a substantial French home or investment property can be enough to trigger it.

We explain who is liable, the €1.3 million threshold and the scale from €800,000, what counts in the base (including property held through companies), the deductible debts, the exemptions, and how non-residents and impatriates are treated, so you know whether the IFI reaches you and what it costs.

What the IFI is

France levies a property wealth tax, the impôt sur la fortune immobilière, or IFI, on real-estate assets. It replaced the older wealth tax (ISF) in 2018 and, unlike its predecessor, falls only on real estate, not on financial assets such as shares, bonds or cash. If you own significant property connected to France, the IFI can apply even after you have left.

For non-residents, the IFI is charged on French real estate only; for residents, it covers worldwide property. The tax is assessed once a year on the net value of the taxable real-estate assets above a threshold.

This guide explains who is liable, how the base and the threshold work, what is deductible, the exemptions, and how non-residents and impatriates are treated, so you know whether the IFI reaches you and what it costs.

Who is liable

Liability depends on residence. A French tax resident is liable on their worldwide real estate; a non-resident is liable only on real estate situated in France. The tax is assessed at household level, covering the property of the household.

So a non-resident who owns a French apartment, house or land, directly or through a company, can fall within the IFI on that French property, while their foreign property is outside the French net.

Establishing your residence and the location of your property is the first step in knowing whether the IFI applies to you.

The threshold

The IFI is due only when the net taxable real-estate wealth exceeds a threshold, currently €1,300,000. Below that level, no IFI is payable. Once the threshold is crossed, however, the progressive scale applies on the fraction of net property value above €800,000, not just above €1.3 million.

This two-figure structure surprises many: you only become liable above €1.3 million, but the tax is then calculated from €800,000 upwards. The first band therefore re-enters the calculation once you are liable.

Knowing both figures, the €1.3 million entry threshold and the €800,000 starting point of the scale, is essential to estimate any IFI charge.

The rates

The IFI is progressive. The scale runs in bands from 0.5% on the portion of net property value between €800,000 and €1.3 million, rising through intermediate bands, up to 1.5% on the portion above the highest threshold. The effective rate therefore depends on the total net property value.

Because the rates are modest in percentage terms but apply annually to large property values, the IFI is a recurring charge that compounds over the years of ownership for substantial holdings.

Applying the progressive scale to your net property value gives the annual IFI charge.

What goes into the base

The IFI base includes real estate held directly (homes, land, buildings) and held indirectly through companies, to the extent the company’s value represents real estate. Shares in property companies such as an SCI, and the real-estate fraction of other company holdings or property funds (SCPI, OPCI), are caught in proportion to the underlying property.

This means you cannot escape the IFI simply by placing French property inside a company: the real-estate value flows through to the base. The look-through is a defining feature of the IFI.

Identifying all the real estate you hold, directly and through structures, is necessary to build the IFI base correctly.

Deductible debts

From the gross value of the taxable real estate, you may deduct debts related to those assets, typically loans used to acquire, build, repair or improve the property, and certain property taxes. The net taxable value is what the threshold and scale apply to.

Deductible debts can substantially reduce the base, so a property bought largely with a mortgage may generate little or no IFI while the loan is outstanding. Anti-abuse rules, however, limit the deduction of certain loans (for example, some interest-only or related-party loans).

Accounting for eligible debts correctly is one of the main levers in an IFI calculation.

The main home allowance

Residents benefit from a 30% allowance on the value of their main home for IFI purposes. This relief recognises that the principal residence is not a liquid investment. Non-residents, who by definition do not have their main home in France, generally cannot claim this allowance on a French property.

For a resident, the 30% allowance can meaningfully lower the taxable value of the largest asset in many households. For a non-resident owning a French second home or investment property, no such allowance applies.

Whether the main-home allowance is available depends on your residence and the use of the property.

Non-residents and the IFI

A non-resident is liable to the IFI on French real estate only. Owning a French holiday home, an investment apartment or land, directly or through a company, can therefore create an IFI liability above the threshold, based solely on the French assets, even though you live abroad.

Foreign property is excluded from a non-resident’s IFI base, which is a key difference from residents. The valuation, the deductible debts and any treaty affecting wealth taxation all shape the result.

If you hold substantial French property as a non-resident, the IFI is a parameter to factor in alongside income tax. See non-resident taxation →

Impatriates and the IFI

New residents qualifying for the impatriate regime benefit from a temporary limitation: during the regime, they are, in principle, liable to the IFI on their French real estate only, rather than on worldwide property. This relief lasts for the impatriate years.

For an executive relocating to France with property abroad, this can be a significant advantage during the benefit period, limiting the IFI to French assets just as for a non-resident.

If you are moving to France, the IFI relief is one more reason to examine the impatriate regime. See the impatriate regime →

Exempt assets

Certain real estate is exempt from the IFI. The main exemption is for property used in the owner’s professional activity (business premises genuinely used by the owner’s operating business), under conditions. Some rural and forestry assets benefit from partial exemptions as well.

These exemptions recognise that property used to run a business is a working tool, not passive wealth. They are condition-bound and must be applied carefully.

Checking whether any of your real estate qualifies for exemption can reduce the IFI base.

How French property is valued

Real estate is valued at its market value on 1 January of the tax year. For directly held property this is the open-market price; for property held through a company, the relevant share of the company’s real-estate value is used. Valuation is a frequent area of attention, as it directly drives the tax.

A defensible, well-supported valuation, based on comparable sales or a professional appraisal, protects you in case of review and avoids overpaying on an inflated figure.

Getting the valuation right, asset by asset, is central to an accurate IFI return.

The cap and treaties

For residents, a cap limits the total of income tax plus IFI to a proportion of income, preventing the combined charge from exceeding a ceiling. In addition, some tax treaties contain provisions affecting wealth taxation, which can influence how the IFI applies in a cross-border situation.

Non-residents, taxed only on French property, are less affected by the income-based cap, but any relevant treaty provision should still be checked. The interaction of domestic rules and treaties can matter.

Reviewing the cap (for residents) and any treaty provision completes the IFI analysis.

Declaring and paying the IFI

The IFI is declared with the annual income tax return: liable taxpayers report their taxable real estate, debts and valuations, and the tax is assessed accordingly. The obligation arises only if you are above the threshold; below it, there is nothing to declare for the IFI.

Keeping clear records of valuations and deductible debts makes the annual declaration straightforward and supports it in case of query. The IFI follows the income-tax calendar.

Meeting the IFI declaration accurately, where you are liable, is part of a clean French tax position.

Structuring French property

How you hold French property affects management and transmission, though not the basic fact that French real estate is within the IFI for those above the threshold. Holding through an SCI, or via dismemberment of ownership (separating usufruct and bare ownership), can serve civil and succession objectives.

These structures do not remove the IFI on French real estate, the look-through rules see the underlying property, but they can assist transmission and management. They must be set up correctly and with the tax consequences understood.

Property structuring is a real planning lever for transmission, within the limits of the IFI.

IFI and inheritance planning

The IFI is an annual charge, but French property also raises inheritance questions, since French-situated real estate is always within French inheritance tax. Planning the holding and transmission of French property addresses both the recurring IFI and the eventual inheritance charge.

Looking at the IFI and inheritance together gives a complete picture of the cost of holding French real estate across the years and on transmission. The two are distinct taxes but closely related in practice.

Coordinating IFI and inheritance planning is sensible for substantial French property. See French inheritance tax →

Common IFI mistakes

Frequent errors include: overlooking the look-through to property held in companies; missing deductible debts (and overpaying); over-valuing property; assuming a foreign holding structure removes the IFI on French real estate (it does not); and, for non-residents, forgetting that French property alone can cross the threshold.

Each of these affects the base or the charge, sometimes substantially. Most are avoidable with a careful inventory of property, correct debts and supportable valuations.

Avoiding these mistakes keeps the IFI accurate and no higher than the rules require.

When advice pays off

The IFI warrants professional analysis when you hold substantial French real estate, especially through companies, with significant debts, or in a cross-border situation where a treaty may apply. The look-through rules, debt limits, valuation and exemptions interact in ways that reward care.

A clear diagnosis builds the correct base, applies the right deductions and exemptions, and confirms whether and how much IFI is due, turning uncertainty into a precise figure.

The assessment is designed to estimate your French position, including the IFI. Start the assessment →

IFI vs the old wealth tax (ISF)

The IFI narrowed the former wealth tax: where the ISF taxed worldwide net wealth including financial assets, the IFI falls only on real estate. Financial portfolios, business assets and most movable wealth are now outside the wealth-tax net.

This shift means that, since 2018, only property wealth attracts the annual charge. For internationally mobile individuals, it changed the calculus of holding French versus other assets.

Understanding that only real estate is taxed clarifies what the IFI does and does not reach.

IFI and rental property

French rental property is within the IFI base at its market value, like any other real estate, while the related acquisition or works loans are deductible. The income it produces is separately taxable as French rental income, so a rental property can attract both income tax and, above the threshold, the IFI.

For a non-resident building a French rental portfolio, the IFI is therefore part of the holding cost to model alongside the income tax on the rents and the eventual gain on sale.

Factoring the IFI into the economics of French rental property gives a realistic view of the net return.

In summary

The IFI is France’s annual property wealth tax, due above a threshold of €1.3 million of net taxable real estate, with a progressive scale from €800,000 and rates up to 1.5%. Non-residents are liable on French property only; residents on worldwide property; impatriates on French property during the regime.

Debts are deductible, some property is exempt, and the look-through rules reach real estate held through companies. For anyone with substantial French property, the IFI is a recurring cost to plan for, alongside income tax and inheritance.

Assessed properly, the IFI is a predictable charge, and one that careful holding, debts and valuations can keep to the legal minimum.

Joint and family ownership

Where French property is owned jointly or across a family, the IFI is assessed at household level, aggregating the taxable real estate of the household against the single threshold. Co-ownership and family holding arrangements therefore affect who is assessed and on what.

For couples and families with French property, this aggregation means the threshold applies to the combined holding, not separately per person. Structuring ownership has IFI as well as succession consequences.

Mapping the family’s combined French property is needed to assess the household’s IFI position.

The €800,000 trap explained

The most misunderstood feature is the gap between the entry threshold (€1.3 million) and the start of the scale (€800,000). You become liable only above €1.3 million, but once liable, the tax is computed from €800,000, so the band between €800,000 and €1.3 million re-enters the calculation.

This means a property portfolio just above €1.3 million already bears tax on roughly €500,000 of value within the first band. The structure is deliberate and catches taxpayers who assume nothing is taxed below €1.3 million.

Understanding this two-figure mechanism avoids underestimating the IFI on holdings near the threshold.

Currency and the IFI

The IFI is assessed in euros on the euro value of French property. For non-residents whose wealth is denominated in another currency, exchange-rate movements affect what the annual charge represents in their home currency, though not the French calculation itself.

This is a practical consideration for budgeting the recurring cost of holding French property from abroad, separate from the tax rules. A weakening home currency raises the real cost of a euro-denominated IFI.

Considering currency alongside the tax gives a truer view of the ongoing cost for a non-resident owner.

Planning the IFI down, legally

Several legitimate levers can reduce the IFI: financing acquisitions and works with deductible debt; claiming exemptions for genuinely professional property; supporting accurate (not inflated) valuations; and, on transmission, using dismemberment so that bare owners and usufructuaries are taxed according to their respective rights.

None of these is artificial: they reflect real economic positions the IFI rules recognise. Combined, they can keep the charge to the legal minimum without aggressive arrangements that the anti-abuse rules would catch.

A considered, rules-based approach is the right way to manage the IFI on substantial French property.

Does the IFI change the case for French property?

For most buyers, the IFI does not deter ownership of a single French home, which sits below the threshold. It becomes relevant for substantial holdings, multiple properties, high-value homes, or large rental portfolios, where the annual charge adds to the cost of ownership and should be modelled from the outset.

Weighed against the appeal of French property, the IFI is a manageable, predictable cost for those above the threshold, especially where deductible debt and accurate valuation are used. It rarely changes a decision on its own, but it belongs in the calculation.

Factoring the IFI into the long-term cost of substantial French property gives a realistic basis for the decision. See buying property in France →

Frequently asked questions

Related English guides

Tax for non-residents · Selling French property · French inheritance tax · Buying property in France · Impatriate regime

Sources: French General Tax Code (IFI: scope, €1.3M threshold, scale from €800,000, look-through to property companies, deductible debts, main-home 30% allowance, professional-asset exemption, impatriate limitation); bilateral tax treaties. Educational content, current as of June 2026; not a substitute for personalised advice.