France’s Wealth Tax (IFI) in 2025: What High-Net-Worth Individuals Need to Know

France’s Wealth Tax (IFI) in 2025: What High-Net-Worth Individuals Need to Know

France’s wealth tax, officially known as Impôt sur la Fortune Immobilière (IFI), is a critical consideration for anyone owning significant real estate assets in France. Whether you're a resident or a non-resident property owner, understanding how the French wealth tax works is essential for managing your financial exposure and optimizing your tax strategy.

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What Is IFI (Impôt sur la Fortune Immobilière)?

Introduced in 2018, IFI replaced the former Impôt de Solidarité sur la Fortune (ISF). While ISF taxed worldwide assets, IFI is limited to real estate holdings, making it more targeted but still highly relevant to wealthy individuals with substantial property interests in France.

Key facts:

• IFI only applies to real estate assets.
• Threshold: Net real estate assets exceeding €1.3 million.
• Tax rates: Progressive, from 0.5% to 1.5% depending on asset value.

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Who Pays the Wealth Tax in France?

The IFI applies to:

• French tax residents, based on their worldwide real estate assets.
• Non-residents, but only on property located in France.

It affects:

• High-net-worth individuals (HNWI)
• Foreign investors with French real estate
• Expatriates with valuable properties in France

Even real estate held through companies (like SCI or SARL) may be taxable under certain conditions.

How Is the IFI Calculated?

The wealth tax is calculated on the net value of taxable real estate after deducting:

• Outstanding property loans
• Exempt assets (e.g., certain business-use properties)

Here’s the progressive IFI scale for 2025:

Net Real Estate Value	Tax Rate
Up to €800,000	0%
€800,001 – €1,300,000	0.5%
€1,300,001 – €2,570,000	0.7%
€2,570,001 – €5,000,000	1%
€5,000,001 – €10,000,000	1.25%
Over €10,000,000	1.5%

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IFI for Foreigners: What Should Non-Residents Know?

Many foreign investors wonder: Does France tax real estate owned by non-residents? The answer is yes. If you're a non-resident, only your French real estate is subject to the IFI.

However, some double tax treaties may reduce or eliminate this liability, depending on your country of residence.

How to Reduce or Avoid IFI Legally

There are several wealth tax planning strategies:

• Holding property through foreign companies (carefully structured)
• Deducting mortgages or loans used to finance the property
• Donating part of the property to reduce taxable value
• Using real estate investment funds (SCPI, OPCI) under certain conditions

Be cautious: The French tax authorities actively monitor tax avoidance structures. Legal advice is essential.

Recent Changes and 2025 Updates

In 2025, the IFI thresholds and tax brackets remain unchanged, but increased scrutiny on high-value properties and foreign-owned companies has been announced. The French government is also reviewing wealth redistribution policies, and future reforms could expand the scope of the wealth tax.

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FAQs About France’s Wealth Tax

✅ Is there a tax on worldwide assets in France?

Only for residents, and only on their real estate assets.

✅ Can you avoid IFI with a company?

Sometimes — but anti-abuse rules apply if the company is deemed a transparent entity (e.g. SCI).

✅ What is the deadline for IFI filing?

IFI is filed alongside your annual income tax return, typically in May or June.

✅ Do non-residents have to file for IFI?

Yes — if their real estate assets in France exceed €1.3 million.

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Conclusion

France’s wealth tax (IFI) continues to be a central issue for property owners, foreign investors, and expats. Whether you're planning a new real estate investment or reviewing your current portfolio, understanding your exposure to the IFI and exploring legal optimization strategies is critical.