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Moving to France? Know the Real Estate Wealth Tax
Impôt sur la Fortune Immobilière (IFI) applies where your net taxable real estate assets exceed €1.3 million (entry threshold), with tax due from €800,000 onwards under a progressive scale ranging from 0.5% to 1.5%.
Key points:
Only real estate assets (held directly or indirectly) are included. Debts relating to taxable property are deductible, subject to anti-abuse limitations. Absent the five-year impatriate exemption (CGI art. 964), worldwide real estate assets are subject to taxation.
Mitigating the IFI Wealth Tax Before Moving to France
IFI applies to real estate held directly or indirectly through entities (companies, trusts, funds), in proportion to the value attributable to underlying real estate assets.
Possible mitigation (subject to strict conditions):
- Exemption for business assets used in a qualifying professional activity (CGI art. 975)
- Minority shareholdings are not automatically exempt from IFI; only the portion corresponding to real estate assets is taxable.
IFI Mitigation for US Property Owners
If rental activity becomes your principal professional activity, you may qualify as Loueur en Meublé Professionnel (LMP) for income tax purposes.
Benefits:
Deduction of rental deficits against overall income (subject to applicable rules) Potential IFI exemption where the property qualifies as a professional asset (see CGI art. 975 above) For unfurnished rentals, obtaining professional status for IFI exemption purposes is significantly more difficult.
Can High Net Worth Americans Avoid French Social Charges?
Important:
CSG/CRDS apply unless you are covered by EU/EEA social security coordination rules. U.S. taxpayer status does not automatically provide an exemption. The France–U.S. tax treaty does not eliminate CSG, except in specific circumstances.
Leaving France? Understand the Exit Tax
You are subject to the exit tax if you meet both of the following conditions on the day you leave France :
Residency Condition: You have been a French tax resident for at least 6 out of the last 10 years preceding your departure.
Asset Thresholds: You hold assets that meet one of these criteria:
2a. You directly or indirectly hold at least 50% of the profits or rights in a company (this would apply to your corporate ownership structures).
2b. The total gross value of your worldwide shareholdings (including your US properties held via companies) exceeds €800,000.
