Do I need to pay France’s IFI property tax as a non-resident?

Posted On:03/01/2025 Updated On:10/10/2025
Tax articles
4 min read

Are you a non-resident property owner in France or abroad, wondering about your IFI tax liability? Navigating French tax law can be challenging, but compliance is essential to avoid penalties. In this article, we’ll guide you through the key aspects of IFI tax and provide expert insights to help you make informed decisions.

What’s the IFI tax implication for non-residents with French and foreign property?
Understanding IFI tax implications for non-residents with french and foreign property

What is IFI tax and who is liable?

The IFI tax is a wealth tax that applies to individuals who own net taxable property worth more than €1.3 million on January 1st of the tax year. This includes property in France and abroad. According to the French tax authorities’ official guidelines on wealth tax, the tax household (foyer fiscal) is taken into account when determining liability. 

Taxation is the price we pay for civilization. – Supreme Court Justice Oliver Wendell Holmes Jr., 1927

How is tax residence determined?

Domicile for tax purposes in France is initially determined in accordance with French domestic law, but a tax treaty between France and the country of tax residence may use certain criteria to establish this domicile. This may result in taxation being shared between the two countries.

If you’re considering setting up a company in France, it’s essential to understand how this might impact your tax obligations. Our company setting-up services can help guide you through the process and ensure compliance with French tax laws.

Tax authorities are increasingly using data and digital technologies to improve tax compliance and reduce tax evasion. – OECD, 2020

Special situations to consider

There are several special situations to consider when determining IFI tax liability. These include:
  • Spouses who are separated from property and do not live under the same roof, as well as spouses awaiting divorce or legal separation who have been authorized to live separately by the judge, are subject to the IFI separately.
  • Adult children attached to their parents’ tax household may be taxed separately for the IFI.
  • Non-residents are taxed solely on their real estate assets and rights located in France, as well as shares in companies or organizations representing a value linked to these assets.

These special situations can have a significant impact on your IFI tax liability, so it’s essential to understand how they apply to your specific situation. If you’re dealing with debt recovery issues related to your property, our debt recovery services can provide assistance and help you navigate the complexities of French debt recovery laws.

Transferring tax residence to France

People who transfer their tax residence to France after having been domiciled outside France for tax purposes for the previous five calendar years are taxable only in respect of their assets located in France. This measure applies until the fifth year following the year of return to France. Thereafter, these persons are taxed under the usual conditions (property located in France and, except where international conventions apply, outside France).

Taxpayers should carefully consider the tax implications of their property holdings and seek professional advice to ensure compliance with tax laws and regulations. – KPMG, 2022

Taxable assets and exemptions

The following assets are taxable:
  • Built property
  • Property under construction
  • Non-built property (building land, agricultural land, etc.)
  • Rights in rem in immovable property (usufruct, right of use, etc.)
  • Shares in companies that directly or indirectly hold property or rights in immovable property
These taxable assets can have a significant impact on your IFI tax liability, so it’s essential to understand how they apply to your specific situation.
 
Exemptions and deductions:
  • Property assets relating to the taxpayer’s professional activity are fully exempt.
  • Certain types of property may qualify for partial exemption, such as woodland and forests, shares in forestry groups, and rural property leased under long-term leases.

Understanding these exemptions and deductions can help you minimize your IFI tax liability. For personalized tax assistance, whether as an individual or a corporate entity, our tax assistance – individuals and corporate services can help navigate the complexities of French tax law.

Debts and deductions

The value of €1,300,000 of assets corresponds to a net value after deduction of debts. Only debts relating to taxable assets are deductible, or in proportion to the fraction of their taxable value. If you’re dealing with business and commercial issues related to your property, our business and commercial issues services can provide expert guidance and help you navigate the complexities of French business and commercial laws.

Filing and payment obligations

The following filing and payment obligations apply:
  • The IFI form must be fulfilled at the same time as the income form(s) for taxpayers who declare income.
  • Non-residents may be required to appoint a representative in France to receive communications relating to the assessment, collection, and litigation of the IFI.
It’s essential to comply with these filing and payment obligations to avoid any potential penalties or fines.
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Get expert guidance from My French Lawyer

Don’t let IFI tax complexities overwhelm you. At My French Lawyer, our registered lawyers are dedicated to providing expert guidance and support to non-resident property owners. Whether you need help with tax compliance, debt recovery, or business and commercial issues, they are here to assist you. Contact us today to learn more about how egistered lawyers can help you navigate the complexities of IFI tax and ensure your peace of mind.

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