French Property Wealth Tax (IFI)
If you are a French taxpayer and own a property with a net value (value after deduction of debts) exceeding 1,300,000 euros, you will be required to pay the French wealth tax known as “Impôt sur la Fortune Immobilière” (IFI). Since 2018, the Property Wealth Tax has replaced the previous Wealth Tax in France.
Who is Concerned by the IFI?
The IFI declaration takes into account all properties owned by every individual within the same tax household. This includes properties owned by minor children for whom you have legal administration responsibilities. Therefore, if you own multiple properties or have joint ownership with other family members, the total net value of all those properties will determine your eligibility for the IFI.
Taxation for French Fiscal Residents and Non-Residents
The taxation rules for the IFI differ depending on whether you are a French fiscal resident or a non-resident.
French Fiscal Residents
As a French fiscal resident, you are subject to the IFI on your worldwide property assets. This means that all properties owned by you, regardless of their location, must be declared and included in the calculation of your net wealth for IFI purposes.
Non-Residents
Non-residents are only subject to the IFI on their French property assets. If you own properties in France but are not considered a fiscal resident, you will need to declare and calculate the net value of those properties for the purpose of IFI taxation.
Properties that Need to be Declared
Various types of properties and rights need to be declared for IFI purposes. These include:
- Properties built in France: Any residential or commercial properties located within the borders of France are subject to IFI.
- Historical Buildings: If you own historical or heritage buildings, such as monuments or properties classified as historical landmarks, their net value must be included in the IFI declaration.
- Buildings Under Construction: Properties that are currently under construction but are intended for residential or commercial purposes must be declared.
- Land: If you own undeveloped land in France, it is also subject to the IFI and must be included in the declaration.
- Properties Owned under SCI: If you own properties through a Société Civile Immobilière (SCI), a legal entity commonly used for property ownership in France, the net value of those properties should be included in the IFI declaration.
- Rights Held on Properties: Any rights you hold on properties, such as the right to remain or the right of use and habitation (droit d’usage et d’habitation), must be declared for IFI purposes.
It is important to note that your main residence benefits from a tax allowance of 30%. This means that the net value of your main home is reduced by 30% before calculating the IFI.
Ask Harrison Brook About Wealth Tax in France
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