PROPERTY WEALTH TAX
(Impôt sur la Fortune Immobilier)

Wealth tax on total assets (Impôt de Solidarité sur la Fortune – ISF) has been abolished and replaced with Impôt sur la Fortune Immobilier (IFI) for 2018.

IFI will apply only to real estate (property)assets worldwide. For the first 5 years of residence here though, only French property will count towards this tax. Your principal residence will always be eligible for a 30% discount on its value for these calculations. If your total relative property portfolio exceeds €1.3million, the following schedule of tax applies, with tax payable on asset values exceeding €800,000:

 

Here are the current rates:

Impôt sur la Fortune (wealth tax) bands*
Up to €800,000 0.00%
€800,001 to €1,300,000 0.50%
€1,300,001 to €2,570,000 0.70%
€2,570,001 to €5,000,000 1.00%
€5,000,001 to €10,000,000 1.25%
Greater than €10,000,000 1.50%
French resident taxpayers with net taxable assets up to €2.57 million do not need to make a separate wealth tax return, as the assets will be declared with their income tax return.
clockface


And now for some good news. There are some allowances available when calculating the value of your 'Fortune'.

 

  • Obviously you need to avoid the temptation to 'talk up' the value of your property, but as a French resident you can deduct 30% of the value of your principal residence.
  • You can exclude any assets used for company or professional purposes. You can also deduct the total of your income and property taxes for the last year.
  • The French parliament has agreed partial exemption for five years from French wealth tax for most people moving to France after 6th August 2008. This exemption is also proposed as part of the new Double Taxation treaty between France and the UK, but that is still awaiting ratification. Beware though; the new exemption only covers assets outside France.
  • If you are non-resident and looking to make a sizeable investment in property in France, you should consider reducing the net value of that asset by taking out a French mortgage, even if you can afford not to. This will reduce the net value of your French property to below wealth tax thresholds.

 

Most importantly, do not bury your head in the sand and try to ignore wealth tax. The French taxman is very patient. He will get you in the end, so it is better to get it all out there in the open from the start.

 

 

coins flat piggy bank coin stack

France Financial is a Spectrum IFA Group partner
Les Aubepines , 6a rue du Barry, Villasavary, 11150, Aude
Tel 0033 (0)4 68 24 77 58 Mobile 0033 (0)6 31 78 76 47
Numéro d'immatriculation 07025 332 TSG (the Spectrum Group) and 07032 505 Mr R Hesketh - www.orias.fr
TSG Insurance Services S.A.R.L. Siège Social: 34 Bd des Italiens, 75009 Paris « Société de Courtage d'assurances » R.C.S. Paris B 447 609 108 (2003B04384) Numéro d'immatriculation 07 025 332 - www.orias.fr
« Conseiller en investissements financiers, référencé sous le numéro E002440 par ANACOFI-CIF, association agréée par l'Autorité des Marchés Financiers»