What is the IFI wealth tax in France, and who has to pay it?

The Impôt sur la Fortune Immobilière (IFI) replaced the old ISF wealth tax in 2018. Unlike the ISF, which covered all wealth, the IFI applies only to net real estate assets. It is due if your taxable real estate net worth exceeds €1.3 million on 1 January of the tax year.

Taxable assets include French and foreign real estate (for French residents), land, buildings, and real estate held indirectly through SCIs or shares in property-holding companies. Financial assets, business assets, and cash are excluded. Mortgages and other real estate debts are deductible from the gross value, subject to some restrictions.

The IFI rates are progressive: 0% up to €800,000, 0.5% from €800,001 to €1.3 million, 0.7% from €1.3 million to €2.57 million, 1% from €2.57 million to €5 million, 1.25% from €5 million to €10 million, and 1.5% above €10 million. A reduction applies to reduce the liability where the net worth is just above the €1.3 million threshold (décote).

The IFI is declared as part of the annual income tax return, not on a separate form, unless your net real estate exceeds €2.57 million, in which case a dedicated annex (Formulaire 2042-IFI) is required.