From ISF to IFI: what changed

If you own significant property connected to France, the wealth tax in france is likely on your radar. In 2018, France abolished the old Impôt de solidarité sur la fortune (ISF), which taxed a household's total net worth, and replaced it with the Impôt sur la fortune immobilière (IFI). The IFI is often described as the new french wealth tax, but the key point is narrower than its predecessor: it taxes real-estate wealth only. Financial assets such as bank accounts, listed shares, bonds, and most business investments are no longer caught. In practice, the french ifi tax turned a broad wealth tax into a targeted property tax on high-value holdings.

  • ISF (broad net-worth tax) was abolished in 2018.
  • The IFI replaced it and applies to real estate only.
  • Financial assets and portfolios are outside its scope.

Who pays, and on what

The french real estate wealth tax is assessed on your household's net taxable real estate as valued on 1 January of the tax year. The threshold sits at roughly €1.3 million of net real-estate wealth: below it you owe nothing, and once you cross it the tax is calculated on a progressive scale at current rates. Residency determines the reach of the tax. French tax residents are liable on their worldwide real estate, wherever the property is located. Non-residents are liable on French real estate only, meaning an apartment in Paris or a house in Provence counts, but property elsewhere does not. Because the rate bands and any temporary measures can change, always confirm the current figures on the official government site before relying on them.

  • Net taxable real estate is measured on 1 January each year.
  • Threshold is approximately €1.3M of net real-estate wealth.
  • Residents: worldwide property. Non-residents: French property only.

Net wealth, valuation, and exclusions

The impôt sur la fortune immobilière is charged on net wealth, not gross value. You take the market value of your qualifying property and deduct allowable debts tied to it, most commonly the outstanding balance of a mortgage used to acquire or improve the asset. Valuation is where most of the difficulty lies: property must be estimated at its real market value on 1 January, which is inherently a matter of judgement and the most common source of disputes and adjustments. Certain assets are also excluded, notably real estate used for a genuine business or professional activity, which can fall outside the taxable base under specific conditions. These rules are technical, so the exclusions and any allowances should be checked against your own facts.

  • Tax base is property value minus deductible debts (e.g. mortgages).
  • Market valuation on 1 January is the main practical challenge.
  • Business or professional-use property may be excluded.

How to declare the IFI

Unlike the old ISF, the IFI does not have a standalone return. It is declared together with your annual income tax return using the dedicated form 2042-IFI, filed at the same time and through the same channel. You list your qualifying properties, their 1 January values, and the deductible debts, and the administration computes the tax due. Getting the property valuations and debt figures right is what makes the difference between a smooth filing and a later reassessment. For the current thresholds, rate scale, and filing rules, consult the official guidance: impots.gouv.fr — Impôt sur la fortune immobilière (IFI). This article is general information only and not personalised tax or valuation advice.

  • Declared with the income tax return on form 2042-IFI.
  • No separate standalone return, unlike the former ISF.
  • Accurate valuations reduce the risk of reassessment.

Questions people ask

Does the French wealth tax apply to my savings and shares?

No. Since the IFI replaced the ISF, only real-estate wealth is taxed. Bank accounts, listed shares, and most financial assets are outside its scope.

I live abroad but own a flat in France. Am I liable?

Possibly. Non-residents are assessed on their French real estate only. If your net French property wealth on 1 January exceeds roughly €1.3M, you may fall within the IFI.

Can I deduct my mortgage from the taxable amount?

The IFI is charged on net wealth, so debts genuinely tied to the property, such as an outstanding acquisition or improvement mortgage, are generally deductible under the applicable rules.

When and how do I declare the IFI?

It is declared with your annual income tax return using form 2042-IFI, based on values as at 1 January. There is no separate IFI return.