French wealth tax: six ways to reduce what you have to pay

THE PROPERTY VALUATION THRESHOLD FOR FRANCE'S IMPÔT SUR LA FORTUNE IMMOBILIÈRE (IFI) IN 2025 IS €1.3MILLION PER TAX HOUSEHOLD 1. GIVE PROPERTY AWAY TO FAMILY MEMBERS  A French resident

can legally give €100,000 to each of their children without any gift tax being payable, and this is renewable every 15 years.  The sum is €31,865 for grandparents to grandchildren. This can

include real estate and investments. It can also be in addition to the ‘family gift’ of money of up to €31,865 every 15 years permitted from someone aged under 80 to each adult child or

grandchild. FRENCH WEALTH TAX 2025 This article is an edited excerpt from our help guide to French wealth tax. The full guide is available to buy for €9.50 at this link. Subscribers can

access it for free on the Subscriber resources page. 2. MAKE A TEMPORARY DONATION OF USUFRUIT Reduce your declarable property wealth with a temporary donation of usufruit.  That is, the use

and benefit of a home or investment, eg. the right to receive rent or income – for example, to a young relative – for a set period via a notarised gift.  This should be for at least three

years. This takes the item out of your declarable possessions for IFI and completely out of the tax unless the person to whom you give it also has to declare. Be aware that the person must

not be part of your foyer fiscal in this case. 3. INVEST IN NUE-PROPRIÉTÉ You may keep a property out of the IFI assessment by the purchase of the nue-propriété only, which is offered by

certain property investment companies (acquisition en nue-propriété). The usufruit – the legal right to use the property – is owned by, for example, a housing  association, which rents the

property to a tenant. During the arrangement, which is  usually for at least 15 years, the property is not counted for IFI.  4. BECOME A PROFESSIONAL PROPERTY LETTER  If you have significant

income from rental properties, you may want to look at the status of loueur en meublé professionnel (professional letter of furnished accommodation). This is for people with rental income

of at least €23,000/year and whose other ‘professional’ income is less than the income from letting.  Because the property is seen as a ‘tool of your trade’, it is not part of your wealth

for IFI. 5. REVIEW YOUR ASSURANCE VIE CONTRACTS  If some of your money placed in assurance vie is invested in property-related schemes, such as an SCI, SCPI or OPCI, or in stock-exchange

listed property shares, you could arrange to take your money out of these and put it into something else that is not taxable to IFI. 6. SELL SOME PROPERTY Consider selling property

investments, such as a buy-to-let property, and put the money into something else: for example, a suitable assurance vie policy, or perhaps invest in the stock exchange. However, bear in

mind that capital gains tax is likely to be payable unless you have owned the property for 22 full years, and social charges unless you have owned it for 30.