French IFI 2026 | France Wealth Tax on Real Estate for Foreign Investors

France’s IFI 2026

Legal Exposure, Structuring Risk and Long-Term Consequences

for Foreign Investors

Why IFI Still Matters in 2026

France remains, in 2026, one of the world’s most attractive jurisdictions for luxury real estate ownership.

Paris, the French Riviera, Alpine resorts and historic estates continue to attract international high-net-worth individuals (HNWIs), family offices and long-term investors seeking asset preservation, lifestyle quality and legal certainty.

France has always been explicit about its fiscal philosophy:

Owning significant real estate assets in France entails ongoing tax exposure and long-term compliance obligations, regardless of nationality or place of residence.

At the centre of this framework stands the French wealth tax on real estate, known as the Impôt sur la Fortune Immobilière (IFI).

For foreign investors, misunderstandings surrounding the French IFI regime remain frequent in 2026 — and increasingly costly as scrutiny intensifies.

This article is not a generic overview. It is a strategic legal analysis.

A Necessary Contextual Warning – Legislative Uncertainty in Early 2026

Before examining the technical framework of IFI, one clarification is essential.

France is currently experiencing a period of political fragmentation and institutional instability, with public finances under sustained pressure and wealth taxation once again at the centre of parliamentary and public debate.

As of 7 January 2026, the IFI regime remains formally unchanged. However, several reform proposals are openly discussed in political, academic and institutional circles.

IFI in 2026 – A Mature Tax, Clearly Defined and Actively Enforced

Introduced in 2018 to replace the former ISF, the IFI has now reached full maturity.

As of 2026, its principles are stable and consistently applied:

· IFI does not tax financial wealth,

· IFI does not impose a general worldwide wealth tax,

· IFI targets real estate exposure connected to France.

What matters is not nationality or residence, but what is owned, where it is located, and how it is structured.

Core parameters (unchanged as of 7 January 2026)

· Tax base: real estate assets only

· Threshold: €1.3 million net taxable real estate

· Rates: progressive, from 0.5% to 1.5%

· Filing: annual, alongside the income tax return

The stability of these parameters does not imply reduced enforcement.

Who Is Subject to IFI in 2026?

Non-residents owning French real estate

Non-residents are subject to IFI only on real estate located in France.

This remains one of the most misunderstood aspects of the French wealth tax.

In 2026, non-residency does not shield French real estate from IFI.

A single high-value Paris apartment or luxury villa may be sufficient to trigger IFI exposure.

A Specific Perspective for US, North America (USA and Canada), Asia and Middle East Investors

France continues to attract investors from the US, Asia, Middle East and GCC countries who value:

· Long-term asset preservation,

· Strong property rights,

· Political and legal continuity,

· Discreet, family-oriented wealth transmission.

For these investors, French real estate is rarely speculative.

It is typically acquired as a generational asset, a strategic European anchor, or a long-term diversification holding.

The French tax system, and IFI in particular, operates on principles that may differ significantly as:

· Economic substance prevails over legal form,

· Personal use of property may have tax consequences,

· Holding property through companies does not automatically ensure tax neutrality,

· Long-term ownership implies ongoing reporting obligations.

IFI should therefore be approached as a structural parameter of a multi-generational legal strategy, not as an annual tax to be optimised in isolation.

French tax residents

French tax residents are subject to IFI on their worldwide real estate assets, whether located in France or abroad.

This commonly affects:

· Expatriates relocating to France,

· Executives on long-term assignments,

· Families establishing residence for lifestyle, education or succession reasons.

IFI as a Structuring Test — Not Merely a Property Tax

In practice, IFI is no longer treated as a simple asset-based levy.
It has become a structuring test.

French tax authorities look beyond legal form and examine:

· Economic substance,

· Beneficial ownership,

· Control mechanisms,

· The real purpose of holding structures.

Real estate held through foreign companies, SPVs, civil companies (SCI) or family holding entities may still fall within the scope of IFI if the structure lacks genuine substance.

Structures effective in other jurisdictions are often inefficient or counter-productive in France.

How IFI Is Calculated in 2026 — and Where Risks Persist

IFI is assessed on the net fair market value of taxable real estate as of 1 January each year.

Deductible liabilities (subject to strict scrutiny)

· Acquisition loans,

· Bank mortgages,

· Certain refinancing arrangements.

As of early 2026, the French tax authorities apply:

· Reinforced anti-abuse rules,

· Close scrutiny of shareholder loans,

· Systematic rejection of artificial or circular debt.

Complexity does not equal sophistication.

Over-engineering remains one of the most frequent and costly mistakes.

IFI Rates Applicable as of 7 January 2026

*Net taxable real estate*	*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%

The real cost of IFI is rarely the tax itself, it is insufficient anticipation at acquisition stage.

IFI and Foreign Investors – Audit and Compliance Risk

Over recent years, IFI has increasingly become a gateway tax.

As of 2026, audits involving IFI frequently extend to:

· Income tax consistency,

· Capital gains history,

· Inheritance and estate planning,

· Aml and source-of-funds reviews.

Foreign-owned French real estate is a priority focus area.

For high-net-worth individuals, IFI is therefore not merely a tax issue, but a compliance and reputation issue.

From Wealth Tax Analysis to Long-Term Legal Oversight

IFI cannot be managed effectively through isolated or one-off advice.

For international investors, it forms part of a broader legal environment combining real estate ownership, structuring choices, compliance obligations and legislative uncertainty.

This is precisely the rationale behind Paris Legal Family Office, a dedicated legal service within Sassi Law Firm, created for foreign investors, international families and family offices holding, or planning to hold, assets in France, including high-value real estate.

Operating exclusively under attorney–client privilege, Paris Legal Family Office acts as a central legal coordinator, ensuring that IFI exposure, ownership structuring, compliance and future regulatory developments are addressed coherently and proactively.

Conclusion – IFI in Early 2026: A Framework to Monitor, Not Ignore

As of 7 January 2026, IFI remains a stable but politically sensitive component of French taxation.

For foreign investors, it should be viewed as:

· A predictable cost of accessing a premier real estate market, and

· A structuring challenge that must be addressed with foresight and flexibility.

Handled correctly, IFI is manageable.

Handled casually, it becomes permanent friction.

Advisory for International Clients

I advise international high-net-worth individuals, family offices and foreign investors on:

· French luxury real estate acquisitions

· Ownership and holding structures

· IFI exposure and long-term optimisation

· Cross-border tax risk

High-stakes tax audits and investigations

I am not a real estate agent.

I act exclusively as an independent lawyer, with no commercial ties to brokers or developers.

A Note on Paris Legal Family Office

Paris Legal Family Office is a dedicated legal service within Sassi Law Firm, created to assist foreign investors, international families and family offices who hold, or plan to hold, assets in France, including high-value real estate.

It operates exclusively within the framework of the law firm and under full attorney–client privilege.

Its role is not to provide financial products, brokerage or property management services, but to act as a central legal coordinator and legal safeguard for all issues affecting French-based assets.

Beyond tax exposure and structuring matters (including IFI, ownership vehicles and compliance), Paris Legal Family Office also intervenes on the practical legal risks inherent to owning property in France from abroad, such as:

· Theft, burglary or occupation issues,

· Construction defects, latent defects or disputes with contractors,

· Conflicts with property managers (syndic de copropriété) or co-owners,

· Governance issues within ownership structures,

· Disputes with service providers,

· Emergency situations requiring immediate legal action or representation in France.

For international clients who cannot manage these matters remotely, Paris Legal Family Office provides continuity, legal coherence and rapid intervention, ensuring that French assets are not only properly structured, but actively protected over time.

In a jurisdiction where tax, property and liability rules are both sophisticated and evolving, this integrated legal oversight allows foreign investors and families to retain control, visibility and legal security, without relying on fragmented or reactive solutions.

A Necessary Contextual Warning – Legislative Uncertainty in Early 2026

This article describes the French tax and legal framework applicable to real estate wealth taxation (Impôt sur la Fortune Immobilière – IFI) as in force on that date (7 January 2026)

As of 7 January 2026, the IFI regime remains formally unchanged. However, several reform proposals are openly discussed in political, academic and institutional circles, including:

· A possible expansion of the tax base,

· Adjustments to valuation rules for high-end real estate,

· Stricter treatment of holding and interposed structures,

· Broader or exceptional wealth-contribution mechanisms linked to real estate ownership.

No definitive legislative change has been enacted at this stage.

For foreign investors, the issue is not speculation, but strategic adaptability.

In early 2026, real estate structuring in France must be designed not only for current law, but with sufficient flexibility to absorb future legislative change without triggering costly restructurings or unintended tax exposure.

The analysis below therefore reflects the legal and tax framework applicable as at 7 January 2026, while underlining the importance of continuous monitoring.

Expertise of Sassi Law Firm – Paris

For over 30 years, our practice, composed of attorneys specializing in Tax, Corporate, and Financial Criminal Law, has assisted international clients high-net-worth individuals and corporations in addressing complex issues related to French wealth taxation, cross-border investments, and international compliance.

Our firm advises both residents and non-residents on all aspects of the Impôt sur la Fortune Immobilière (IFI), commonly known as the French Wealth Tax, including asset valuation, declaration requirements, and strategies for legal optimization and regularization.

Areas of Intervention

Our legal professionals are actively involved in matters covering:

Wealth tax compliance (IFI): asset valuation, declaration, and audit defense.
International structuring: ownership through French or foreign companies (SCI, holding entities, or trusts).
Tax audits and investigations: representation before the Direction Générale des Finances Publiques (DGFiP) and French tax courts.
Voluntary disclosures and tax regularizations, particularly for undeclared real estate holdings.
Financial and corporate criminal law, including tax fraud, money laundering, and unlawful asset transfers.

Our team regularly assists during urgent proceedings such as tax investigations, seizures, account freezes, and international information requests, ensuring efficient protection of our clients’ rights and interests.

Reputation and Media Presence

The long-standing experience of Mabrouk Sassi, attorney registered with the Paris Bar, in the field of tax and financial criminal law has earned the firm a solid reputation within the business community.

Mr. Sassi has been regularly featured in major media outlets, including L’Express, Les Échos, L’Expansion, L’Entreprise, and BFM Business, where he provides expert commentary on tax and financial legal issues.

An International Practice

Our clients include individuals, companies and family offices located across North America, Asia, the Middle East, Europe, and Africa.

We provide legal assistance for:

French wealth tax compliance for non-residents owning real estate in France;
Cross-border investments involving France and offshore jurisdictions;
Tax optimization and anti-abuse risk management under OECD and EU frameworks.

The firm also represents clients before French administrative and criminal courts for matters related to IFI reassessments, asset concealment allegations, or fraud proceedings.

Contact

Mabrouk Sassi, Attorney at Law – Paris Bar

Sassi Law Firm

32 avenue Carnot – 75017 Paris – France

infos@sassi-avocats.com

+33 7 71 58 58 58

www.sassi-avocats.com

French Wealth Tax (IFI)