Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult qualified professionals before making decisions about your French property investments.
Update, 7 November 2026: a usufruct holder declares the full value of the property for IFI, even after giving away the bare ownership. Our guide to usufruct and bare ownership explains the exceptions.
If your French property portfolio is worth more than €1.3 million, France wants a slice of it every year, and it doesn’t matter whether you live in Chelsea or Chamonix. The impôt sur la fortune immobilière (IFI), France’s annual wealth tax on real estate, applies to non-residents just as much as to residents, on any French property they own directly or indirectly. The good news: as a non-resident, you’re only taxed on your French-located real estate, not your worldwide portfolio. The less good news: one Paris flat and a Riviera résidence secondaire can take you over the threshold.
Here’s everything British investors need to know about IFI for the 2026 filing season: who owes it, what counts, what doesn’t, how it’s calculated, how much it’ll cost you, and when to file.
What Is the IFI, and Why Should You Care?
The impôt sur la fortune immobilière (IFI) is France’s annual wealth tax on real estate. It replaced the broader impôt de solidarité sur la fortune (ISF) in 2018. The base shrank to property, dropping shares, bonds and cash. Art was already outside the ISF, and the rate scale stayed the same. The idea was to stop discouraging financial investment while keeping a visible tax on property wealth.
The IFI hits individuals (personnes physiques) whose net taxable real-estate patrimony exceeds €1.3 million on 1 January of the tax year — whether they are French tax residents or not. The net taxable figure is the gross value of your French real estate minus allowable debts. Once you cross that threshold, the tax is actually calculated starting from €800,000 (a quirk we’ll unpack below), using a progressive scale that runs from 0.5% up to 1.5% of the taxable slice.
Do Non-Residents Pay IFI? (Yes — But Only on French Property)
This is the point that matters most for British owners, so let’s be precise.
- If you are a French tax resident, IFI applies to your worldwide real estate — your flat in Lyon, your Yorkshire cottage, your Florida condo, the lot.
- If you are a non-resident (UK-domiciled British investor, for example), IFI applies only to French-located real estate — whether you own it directly or indirectly through shares in a property company. Your home in Surrey and your pension fund are irrelevant for IFI purposes.
There’s also a useful sweetener for British investors who relocate to France. If you weren’t French tax resident in any of the five calendar years before you move, only your French property is taxed, until 31 December of the fifth year after the year you arrive (article 964 of the CGI). After that, your UK property enters the IFI base too. This is a meaningful planning opportunity if you’re considering a permanent move, but it doesn’t help a Briton who left France recently.
If you own your French property through a société civile immobilière (SCI), as many British investors do, note that indirect ownership is captured too. You declare the value of your SCI shares, not the gross value of the property, so the SCI’s bank loan reduces it. A loan you made to the SCI yourself usually doesn’t, unless you show it wasn’t mainly tax driven. We covered the mechanics of SCI ownership in our complete guide to owning shares in a French SCI, and the formalities of setting one up in how to create a société civile in France. If you are still deciding between the two routes, our SCI or your own name decision guide sets out what the company changes when you buy, hold and sell.
The €1.3 Million Threshold: Easier to Hit Than You Think
The threshold is measured on 1 January of the tax year, net of debts, across the entire foyer fiscal (household). That last point catches people out. For IFI, the household pools the property of:
- a single person (unmarried, widowed, divorced, or separated); or
- a couple living together, regardless of marital regime — mariage, Pacs, or even concubinage notoire (publicly cohabiting).
The property of minor children whose assets you legally administer is included in your household’s base. Adult children who are fiscally attached to your income-tax return, however, are not part of your IFI household — they form their own IFI household if their personal taxable real-estate patrimony exceeds €1.3 million.
Crucially, the IFI household is not always the same as the income-tax household. Even unmarried partners in concubinage notoire must pool their property for IFI. For British investors who co-own a French property with a partner outside marriage, this means the pool counts both of your shares against the €1.3M threshold.
How fast can you hit €1.3M in French real estate? Faster than you’d think. A large flat in central Paris together with a second home on the coast or in Provence can take you over the threshold. Our regional property guide has price benchmarks for the main French markets.
What Property Is Taxable?
Broadly, every interest you hold in French real estate goes into the base — whether you live in it, let it out, or leave it empty. The official list (non-exhaustive) includes:
- Your primary residence, valued at 70% of market value thanks to a statutory 30% abatement.
- Other built properties, whether occupied personally or let out: houses, apartments, and their outbuildings (garages, parking spaces, cellars).
- Historic monuments (monuments historiques) that are privately owned.
- Property under construction on 1 January.
- Unbuilt land: terrains à bâtir, agricultural land, forests (with partial exemptions for the latter two — more on that below).
- Indirect real-estate holdings: your share of property held through any company or fund, including SCIs, SCPIs, OPCIs, and even real-estate-backed assurance-vie contracts (the so-called unités de compte immobilières).
- Real-estate assets that don’t meet the “professional asset” exemption conditions — see below.
The 30% abatement on the primary residence is one of the few generous features of IFI. If your main French home is worth €1.5M on the open market, you declare it at €1.05M. This can keep a household that owns one home below the threshold. But it only applies to one property per household, only if it’s genuinely the place you habitually live, and not to a home held through an SCI. For a UK resident, a French home is a second home, so the abatement doesn’t apply.
What’s Exempt?
A handful of real-estate categories are outright exempt from IFI or benefit from generous partial exemptions.
Professional Real Estate (Biens professionnels)
Real estate that is necessary for your principal professional activity is fully exempt. The conditions are tight:
- the property must be used in an industrial, commercial, artisanal, agricultural, or liberal profession;
- the activity must be carried on by the property owner, their spouse, Pacs partner, concubin, or minor children under legal administration;
- the activity must be the taxpayer’s principal profession;
- the property must be used for that activity.
Shares or stock in a company that directly holds the professional real estate are also exempt, provided the owner exercises their principal professional activity in that company.
For most British investors, this exemption won’t help, unless you run a French-based trade or consultancy from the premises. A buy-to-let investor does not, in principle, qualify. Furnished letting counts only if receipts top €23,000 a year and exceed half the household’s income from work and business, the test for a loueur en meublé professionnel. Our LMNP guide covers the distinction between furnished lets and the (rarer, stricter) LMP regime.
Forests, Woodlands and Farmland
Forests, woodlands, and shares in groupements forestiers (forestry groupings) or groupements fonciers agricoles benefit from a 75% partial exemption, subject to holding period and management commitments. Long-term-leased farmland (biens ruraux loués à long terme) gets similar treatment. These are specialist asset classes and unlikely to be a feature of most British investors’ French holdings, but worth knowing about if you’re thinking of diversifying into groupements forestiers for estate-planning reasons.
What Debts Can You Deduct?
IFI taxes net patrimony, which means you can deduct debts linked to your taxable real estate from its gross value. Specifically, the following liabilities are deductible provided they exist on 1 January of the tax year:
- Acquisition debt on your real estate (your French mortgage, in other words).
- Debts for works of improvement, construction, reconstruction, or enlargement.
- Debts for upkeep (entretien).
- Property taxes owed on those assets (taxe foncière, for example).
- Acquisition debt on shares in property-holding companies, pro-rated to the value of the taxable real-estate assets inside that company.
For a British investor financing a French property with a euro-denominated mortgage (see our French mortgage guide for non-residents), this is straightforward: the outstanding capital on 1 January reduces your IFI base. An interest-only (in fine) loan isn’t deducted at its full balance, though. Article 974 of the CGI treats it as repaid in equal yearly slices over its term, so on a €300,000 loan over 15 years, only €200,000 is deductible after five years.
The 60% Cap on Deductible Debts
There’s an important anti-abuse rule for larger portfolios: if your gross taxable real estate plus taxable shares exceed €5 million, and your deductible debts exceed 60% of that gross value, then the portion of debt above the 60% threshold is only deductible at 50%. Loans you show weren’t mainly tax driven are left out of this cap. Below €5M of gross taxable property the cap never applies, so it only matters for high-net-worth buyers deploying heavy debt.
The Rates: A Progressive Scale
Once you’re subject to IFI, the tax is calculated on a sliced, progressive basis starting from €800,000 — not from €1.3 million. That’s the quirk we mentioned earlier. Crossing the €1.3M threshold is what makes you liable at all, but once you’re in, the calculation backfills from €800,001. Here is the full scale (barème) set out in article 977 of the code général des impôts:
| Slice of net taxable patrimony | Rate |
|---|---|
| €0 – €800,000 | 0% |
| €800,001 – €1,300,000 | 0.5% |
| €1,300,001 – €2,570,000 | 0.7% |
| €2,570,001 – €5,000,000 | 1% |
| €5,000,001 – €10,000,000 | 1.25% |
| Above €10,000,000 | 1.5% |
A Worked Example
Suppose a British couple living in Paris own their €1.8M flat there directly, so it’s declared at €1.26M after the 30% abatement. They also own a €500,000 house in the Luberon through an SCI, and no property outside France. They have an outstanding French mortgage of €260,000 on the Paris flat. Their net taxable patrimony is:
€1,260,000 (Paris, post-abatement) + €500,000 (Luberon SCI share) − €260,000 (mortgage) = €1,500,000
They are over the €1.3M threshold, so IFI applies. The calculation, per the barème:
- First €800,000 × 0% = €0
- €800,001 to €1,300,000 (€500,000 slice) × 0.5% = €2,500
- €1,300,001 to €1,500,000 (€200,000 slice) × 0.7% = €1,400
- Total IFI: €3,900.
If the same couple had no mortgage, their base would be €1,760,000 and their IFI would be roughly €3,900 + (€260,000 × 0.7%) = €5,720. The debt deduction is worth almost €2,000 a year, which is why properly declaring your French mortgage matters.
The Décote: A Smoothing Mechanism at the Threshold
Without any smoothing, crossing €1.3M by €1 would suddenly cost you €2,500 of tax — a harsh cliff edge. France softens the bump with a décote (tapered discount) for taxable patrimonies between €1.3M and €1.4M. The formula is:
Décote = 17,500 − (1.25% × net taxable patrimony)
So at €1.3M, the décote is 17,500 − 16,250 = €1,250, which cancels half of the €2,500 entry tax. At €1.4M, it’s 17,500 − 17,500 = €0 and tapers out. Above €1.4M, there’s no décote at all. The effect is to ease the transition into IFI rather than hit new entrants with a sudden full bill.
How to Reduce Your IFI
There are two principal levers for reducing your IFI bill legally, beyond proper debt deductions:
Charitable Giving
Gifts to qualifying organisations reduce your IFI by 75% of the amount donated, up to a maximum reduction of €50,000. This means giving €66,667 to an eligible body yields a €50,000 IFI reduction, so the French state effectively pays three-quarters of your gift. The list in article 978 of the CGI is closed. It covers recognised foundations, research and higher education bodies, work integration charities and a few business creation associations. Approved bodies in the EU or EEA can also count, on line 9NG of the 2042-IFI form. UK charities don’t, as the UK is in neither.
The Plafonnement (Income Cap)
French tax residents benefit from a plafonnement that caps the combined total of their French and foreign income taxes plus IFI at 75% of worldwide income (net of professional expenses, including income exempt from income tax and amounts subject to prélèvement libératoire). It exists to stop the IFI from confiscating more than three-quarters of a taxpayer’s income in a low-earning year — the retiree-with-a-large-portfolio scenario.
Here’s the catch for British investors: Article 979-I of the CGI restricts the plafonnement to “le redevable ayant son domicile fiscal en France” — French tax residents only. If you’re UK-resident, you cannot claim it, even if your French property is your main asset and your worldwide income is modest. The only exception is the narrow “Schumacker non-resident” doctrine (EU/EEA residents whose income is 75%+ French-sourced), and post-Brexit that door is closed to UK residents. It’s one of the genuine downsides of holding French real estate as a non-resident: the IFI bill lands in full, uncapped against your UK income.
Declaring and Paying Your IFI
You declare IFI with your income tax return, but you pay it separately, on its own notice. Here’s how the 2026 campaign worked, based on what you owned on 1 January 2026:
1. Which Form?
Two possibilities, depending on whether you have taxable French income:
- Form 2042-IFI (cerfa N°15798*09): used if you are also filing a standard French income-tax return (form 2042). The 2042-IFI is filed as an annex.
- Form 2042-IFI-COV: if you file no French income return (for example, a British non-resident with a French holiday home and no French rental income), you still complete the 2042-IFI. On paper it goes with the 2042-IFI-COV, a short cover form that identifies you. You can also file both online.
Online filing is now the default for anyone with internet access, regardless of revenu fiscal de référence. Paper filing is tolerated only if you genuinely cannot file online.
2. Where to File — Non-Residents Have a Dedicated Office
British non-residents do not file with their local Service des impôts des particuliers (SIP), because they don’t have one. Instead, they file with the dedicated non-resident tax office:
Service des impôts des particuliers non-résidents
10, rue du Centre – TSA 10 010
93 465 NOISY-LE-GRAND Cedex, France
Monaco residents file with a different specialist office in Nice. French tax residents file with their local SIP as normal.
3. Key Deadlines for IFI 2026
The deadlines depend on your filing method and your département of residence:
- Paper filing: 19 May 2026 (all filers).
- Online filing, zone 1 (départements 01 to 19, Monaco residents, and non-residents): 21 May 2026.
- Online filing, zone 2 (départements 20 to 54): 28 May 2026.
- Online filing, zone 3 (départements 55 to 976): 4 June 2026.
As a UK-based British investor with French property, you fell into zone 1 in 2026, with an online deadline of 21 May 2026. These 2026 dates have passed, and the 2027 dates will be in the 2027 IFI notice on impots.gouv.fr.
4. Paying the Bill
You’ll receive a separate avis d’imposition for your IFI, distinct from your income-tax notice. Payment is typically due on or around 15 September of the tax year.
- Any IFI bill above €300 must be paid electronically — via your espace particulier on impots.gouv.fr or the app — from a SEPA-zone bank account.
- Bills of €300 or less can also be paid by TIPSEPA, cheque, cash, or card at a buraliste or approved paiement de proximité partner.
IFI bills above €300 must be paid electronically. The UK is part of the SEPA zone, so a UK account can pay online if your bank accepts SEPA direct debits. Some banks don’t, so check with yours before the deadline. Our guide to moving GBP to EUR discusses the mechanics of holding euros as a UK resident.
The “Gérer Mes Biens Immobiliers” Service
Since August 2021, impots.gouv.fr has offered a service called Gérer mes biens immobiliers (GMBI, “manage my real estate”) in your espace particulier. It lists the buildings registered to you in France, with details such as floor area, number of rooms and lot number. For British investors trying to reconcile what the French tax administration thinks they own versus what they actually own, GMBI is invaluable. It’s also how you now report occupancy status for taxe d’habitation purposes. Use it, and check that the data matches your own records.
The Practical Checklist for British Investors
- Value your French real estate at market value on 1 January 2026. Be realistic. The French tax authorities can challenge lowball valuations using comparable sales data from the Demande de valeur foncière (DVF) register.
- Apply the 30% abatement only to a home you own directly and live in most of the year. A UK resident’s French home doesn’t qualify, and nor does a home held through an SCI.
- Add your share of any SCI/SCPI/OPCI holdings at their proportional real-estate value (line 9CA on form 2042-IFI).
- Subtract outstanding French mortgage balances and any related acquisition / improvement / maintenance debts existing on 1 January.
- Apply the 60% cap on deductible debts only if your gross taxable real estate exceeds €5M and your debts exceed 60% of it.
- Check whether you exceed €1.3M net. If yes, file IFI. If no, nothing to do this year.
- Compute the IFI using the progressive barème from €800,000 onwards.
- Apply the décote if your net taxable patrimony is between €1.3M and €1.4M.
- Apply charitable-giving reductions (75% up to €50,000) if applicable.
- File online by 21 May 2026 via impots.gouv.fr (non-resident zone).
- Pay by 15 September 2026, electronically from a SEPA account for bills above €300.
Takeaway
The IFI is not usually a dealbreaker for British investors. The marginal rates are 0.5% and 0.7% up to €2.57M, but the average is lower: on a €1.5M net base, IFI is €3,900, about 0.26% a year. But it’s a recurring, highly visible cost that compounds over decades, and it’s one of the first things to factor into the acquisition arithmetic for a second home or high-end investment property in France. Forecast it into your cash-flow model from day one, hold the correct leverage to take full advantage of the debt deduction, and if your portfolio is approaching €5M, take specialist advice on the 60% debt cap and on SCI structuring. Our step-by-step buying guide walks through the full cost stack, of which IFI is now a standing line item.
Frequently Asked Questions
Do British non-residents have to pay the French wealth tax on property (IFI)?
Yes, but only on real estate located in France — directly owned or held indirectly through a company such as an SCI. Your UK property and non-French assets are not in the IFI base for a British non-resident.
What is the IFI threshold for 2026?
€1.3 million of net taxable real-estate patrimony on 1 January 2026, measured across the entire IFI household (couple, Pacs partners, or concubins, plus minor children under legal administration).
When is the IFI filing deadline in 2026?
For non-residents filing online, the deadline is 21 May 2026. Paper filers have until 19 May 2026. Online filers in French départements 20–54 have until 28 May 2026, and 55–976 until 4 June 2026.
Is my mortgage deductible for IFI purposes?
Yes. The outstanding capital balance of a French mortgage on 1 January of the tax year is deductible from the gross value of the financed property. Debts for improvement, construction, and maintenance are also deductible. Be aware of the 60% deductibility cap if your gross real estate exceeds €5 million.
Does my primary residence count for IFI?
Yes, but with a 30% abatement on its market value, so a main home worth €1.5M is declared at €1.05M. The abatement applies to one property only: a home you own directly and live in most of the year. A UK resident’s French home doesn’t qualify, and nor does a home held through an SCI.
What if I move to France — do I pay IFI on my UK property?
If you weren’t French tax resident in any of the five calendar years before you move, only your French property is taxed, until 31 December of the fifth year after the year you arrive. After that, your property worldwide enters the IFI base. A Briton who left France recently doesn’t qualify.
Which form do I use — 2042-IFI or 2042-IFI-COV?
Everyone liable uses form 2042-IFI. If you also file a French income-tax return, it goes with that return. If you file no French income return, add the 2042-IFI-COV cover form, or declare online.
