Property Wealth Tax in France (IFI)

Property wealth tax - “IFI” or “impot de solidarité sur la fortune immobilière”: This tax is calculated on the total fair market value of all your real estate assets owned in France less any French loans outstanding on the property. 

Therefore taking a French mortgage can help you reduce or avoid this tax. 

If you are a French resident, the “IFI” will be computed on your worldwide real estate properties. If you are a not a permanent resident in France (for tax purposes), it's only calculated on the real estate assets you have in France. Interest only mortgages do not qualify for full deductibility but instead will be treated much like amortizing loan interest for the IFI tax calculation.

Note that the wealth tax is only triggered when you own more than 1.3 million € net of debt.

French Property Wealth Tax	Tax Rate (%)
Up to € 800,000	0.00 %
From € 800,000 to 1,300,000	0.50 %
From € 1,300,000 to € 2,570,000	0.70 %
From € 2,570,000 to € 5,000,000	1.00 %
From € 5,000,000 to € 10,000,000	1.25 %
Over € 10,000,000	1.50 %

CASE STUDY : 

You purchase a property worth 2,850,000 € with French mortgage of 1 200,000 €. 

How much IFI property wealth tax will be due?

IFI with a French mortgage
Market value of property	2 850 000 €
French mortgage	1 200 000 €
Taxable value for IFI	1 650 000 €
	Tax Rate (%)	Tranche	Tax due per tranche
up to 800k €	0
800k to 1300k €	0,50%	500 000 €	2 500 €
1300k to 1650k €	0,70%	350 000 €	2 450 €
Total annual IFI tax due			4 950 €
IFI with no French mortgage
Market value of property	2 850 000 €
Taxable value for IFI	2 850 000 €
	Tax Rate (%)	Tranche	Tax due per tranche
up to 800k €	0
800k to 1300k €	0,50%	500 000 €	2 500 €
1300k to 2570k €	0,70%	1 270 000 €	8 890 €
above 2570k €	1,00%	280 000 €	2 800 €
Total annual IFI tax due			14 190 €

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