French Real Estate Wealth Tax (IFI): What Egyptian Investors Must Know in 2025

French Real Estate Wealth Tax (IFI): What Egyptian Investors Must Know in 2025

The Impôt sur la Fortune Immobilière (IFI) is an annual French tax that applies to individuals with net real estate assets in France exceeding €1.3 million. This includes non-residents, such as Egyptian nationals, who own real estate in France. If you are an Egyptian investor, understanding your tax exposure and knowing how to optimize your property holdings is essential to avoid costly mistakes.

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What is IFI and Who is Subject to It?

Since 2018, the IFI has replaced the former Wealth Tax (ISF) and now only targets real estate assets — not financial assets.

The IFI applies to:

• French residents on their worldwide real estate
• Non-residents on real estate located only in France

The tax is calculated on the net value of all taxable real estate held as of January 1st each year.

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Are Egyptian Nationals Liable for IFI?

Yes. Egyptian nationals who own real estate in France are subject to IFI, as long as their net property value exceeds €1.3 million.

While France and Egypt signed a double tax treaty in 1980, the IFI is not covered by that agreement. Therefore, IFI applies in full, and cannot be offset under the treaty.

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What Real Estate Assets Are Taxable?

Taxable assets include:

• Directly owned homes, apartments, and land in France
• Rental properties (even if not rented)
• Shares in French or foreign companies primarily holding French real estate (like SCIs)
• Rights like usufruct, joint ownership, or naked ownership

Not taxable:

• Property used exclusively for professional purposes
• Certain dismembered assets if legally justified
• Debts such as mortgages or loans related to the real estate

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How to Optimize or Reduce IFI Liability

Several legal strategies may help reduce your IFI burden:

• Creating a Société Civile Immobilière (SCI) to hold real estate
• Using property dismemberment (e.g. usufruct/naked ownership split)
• Applying valuation discounts for co-owned or rented properties
• Deducting qualifying debts or expenses

However, these strategies must be carefully reviewed with a French tax expert to avoid reassessment risks.

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How to File the IFI Tax Return from Egypt

If you’re an Egyptian resident, you must file Form 2042-IFI each year alongside the general income tax return, even if you don’t earn income in France.

Filing options:

• Online via impots.gouv.fr (non-resident portal)
• Paper submission via international post (if required)

Taxes can be paid by international bank transfer or credit card through the tax portal.

 

Common Questions from Egyptian Investors

• Is my rental apartment in Paris taxable?

→ Yes, unless it qualifies as professional property (rare for non-residents).

• Can an SCI protect me from IFI?

→ Not necessarily. Transparent SCIs do not shield you from IFI.

• What if I hold French property through a foreign company?

→ If the company’s main purpose is real estate, IFI still applies.

 

Expert Advice for Egyptian Real Estate Owners

If you are an Egyptian investor with real estate in France:

• Seek professional advice to structure your assets strategically
• Update property valuations annually
• Stay alert to changes in French tax laws
• Consider a simulation to assess your exposure and identify savings

 

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For over a span of 25 years, our corporation comprising of attorneys specializing in Fiscal Law has provided assistance to corporations, their executives, and people engaged in tax and financial affairs, including problems related to foreign bank accounts and offshore firms, both domestically in France and internationally.

 

Consequently, our legal professionals actively engage in all matters pertaining to corporate and tax law.

 

This enables prompt intervention in situations requiring the implementation of preventive measures.

 

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Our clients comprises both domestic entities, comprising firms and persons located across several regions of France, such as Dom Tom (Martinique, Guadeloupe, Tahiti, New Caledonia, Mayotte, etc.), as well as international entities, including companies and individuals situated in regions such as Asia, the Middle East, Maghreb, and Africa.

 

Please feel free to reach out to us for any inquiries or requests for assistance pertaining to any regions of France, including the overseas territories (Dom Tom), as well as international locations.

 

Contact:

 

Mabrouk SASSI, lawyer Paris Bar

32 avenue Carnot – Paris 17th - France

infos@sassi-avocats.com

Tel 07.71.58.58.58

 

The following links may be of assistance:

 

• The General Tax Code (CGI) refers to the comprehensive set of regulations and laws that govern the taxation system within a certain jurisdiction. It encompasses the many provisions and guidelines that dictate the assessment

 

• The provided link directs to the official website of Legifrance, which is the French government

 

• The subject of discussion pertains to the doctrine of tax administration within the Ministry of Budget.

 

• The provided URL leads to the official website of the French tax administration.

 

• The provided link directs to the official website of the French tax administration, specifically to the section

 

• The Ministry of Economy and Finance is a governmental institution responsible for overseeing and managing economic and financial matters within a certain jurisdiction.