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

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

France remains one of the world’s most desirable destinations for luxury real estate investment, and Qatari nationals—both individuals and state entities—are among the most prominent foreign owners of prime property in cities like Paris, Cannes, and Courchevel.

However, since 2018, any real estate holdings in France above €1.3 million in net value may be subject to the French Real Estate Wealth Tax, known as the Impôt sur la Fortune Immobilière (IFI).

This article offers a comprehensive guide for Qatari high-net-worth individuals, family offices, and sovereign entities regarding the scope, structure, and strategies surrounding the IFI in 2025.

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What Is the IFI and Who Does It Concern?

The IFI is an annual tax that applies to natural persons who own real estate assets in France, whether as direct owners or through holding structures.

Two categories of taxpayers exist:

• French residents are taxed on their worldwide real estate.
• Non-residents, including Qatari nationals, are taxed only on property located in France.

You are liable for IFI if the net value of your real estate in France exceeds €1.3 million on January 1st of each tax year.

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Are Qatari Nationals Liable for IFI?

Yes. Qatari citizens and legal persons, even if resident in Doha or acting through investment companies, are subject to IFI if they hold property in France beyond the taxable threshold.

There is a tax treaty between France and Qatar, signed in 2009 and ratified in 2011. However, it does not exempt Qatari investors from the IFI, as the treaty primarily covers income and corporate taxes, not wealth-based real estate taxation.

In other words, even if your investments are structured through French Properties Management or similar vehicles, they remain within IFI scope, unless specifically exempted under French law (e.g. assets used for business purposes).

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What Types of Property Are Taxable?

IFI includes the following asset types:

• Directly owned real estate: apartments, villas, mansions, land
• Properties held through companies, such as:
  • French SCIs (Société Civile Immobilière)
  • Foreign companies whose main purpose is holding French property
• Prestigious assets: homes in the Triangle d’Or (Paris), luxury villas on the Riviera, chalets in Courchevel

Also included:

• Rights in property: usufruct, bare ownership, or joint ownership
• Indirect holdings where French tax authorities can “look through” the structure

Excluded:

• Assets used strictly for commercial or professional purposes, under strict documentation requirements

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Can Qatari Investors Reduce or Structure Their IFI Exposure?

Yes, with the help of advanced tax structuring, several strategies can minimize IFI exposure:

• Property dismemberment: separating usufruct and nue-propriété (bare ownership) to reduce valuation
• Debt deduction: mortgages and loans can reduce the taxable base, provided the financing is properly documented
• Valuation discounts: co-ownership, tenant occupation, or indivision may justify partial discounts

Note: France has implemented anti-abuse rules. Holding companies and structures may be “requalified” as transparent, making the individual ultimately liable unless the company meets strict independence and operational criteria.

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Filing and Paying IFI from Qatar

Non-residents, including Qatari nationals, must declare IFI via Form 2042-IFI, alongside the general income tax return.

Filing methods:

• Online via impots.gouv.fr
• Paper filing if access to the French tax portal is unavailable

Payment methods:

• International wire transfer from a Qatari or European bank
• Secure online card payment via the French Treasury

The filing season generally runs from April to June each year.

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Questions from High-Net-Worth Qatari Investors

I own real estate in France via a sovereign wealth fund. Am I exempt?

→ Not automatically. Unless the entity qualifies as a tax-exempt institution under French law, IFI may apply.

I purchased an apartment on the Champs-Élysées. Does it qualify as a professional asset?

→ If it’s for personal use or rental income, then yes — it's taxable. Business use would need to be proven and documented.

I hold multiple properties across France. Can I consolidate or segment the declaration?

→ All real estate must be consolidated in one annual IFI declaration per taxpayer. Specific deductions apply per property but are declared globally.

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Why Expert Tax Advice Is Crucial

• French tax authorities scrutinize foreign ownership, especially when structures are involved
• Qatari investors often deal with large-scale acquisitions and require bespoke structuring
• IFI may impact estate planning, inheritance taxes, and compliance with OECD transparency rules

Work with a French tax lawyer or advisory firm familiar with Middle Eastern investors, sovereign wealth vehicles, and cross-border tax planning.