Property wealth tax (IFI) for non-residents who own property in France and/or abroad
Only people who own net taxable property assets valued at more than €1.3m on 1 January of Year N will be required to file a property wealth tax (IFI) return in Year N+1.
This includes all property assets held by all members of the tax household (you, your spouse/ civil partner/common-law partner, and any minor children whose assets either of you legally administer).
- You and your spouse are each independently subject to property wealth tax if you are married under a separation of property regime and do not live at the same address, or if you are undergoing divorce or separation proceedings and have been authorised to reside separately by the judge.
- A child over the age of majority who does not personally file an income tax return because they belong to their parents’ tax household may be independently subject to property wealth tax.
Who needs to file a property wealth tax return
If you are a non-resident of France for tax purposes, you are only liable for tax in France on your properties and property rights located in France and on your stocks or shares in companies or bodies (established in France or abroad) for the representative fraction of the value of such property or property rights.
Note: French nationals who are tax residents of Monaco are liable for property wealth tax under the same conditions as tax residents of France.
Whether your tax residence is in France is first determined by French law, but if there is a tax treaty between France and your country of residence, it may include criteria used to establish tax residence. The outcome may be a shared tax liability in both countries.
You may wish to consult the international tax treaties available on this site. See also “I’m non resident. What are the main elements of income to be reported?”
If you return to France: If you transfer your tax domicile to France after having been domiciled outside France for tax purposes during the previous five calendar years, you will be taxed only on your property located in France. This measure applies up to the fifth year following your return to France, after which you will be taxed the same as any other tax resident of France (property located in France or, unless otherwise covered by an international tax treaty, outside France).
Unless considered business assets, taxable assets include:
- Property under construction on 1 January of the year of taxation
- Non-building properties (building lots, farmland, non-exempt forestland, etc.)
- Real property rights (usufruct, easements, rights as a tenant under a construction lease, etc.)
- Share or stocks of companies that directly or indirectly own property or property rights, for the representative fraction of such property or rights
Property assets used for business purposes are exempt.
The €1.3m figure is a net value, after deduction of debts. Deductible debts are limited to those associated with taxable assets, or in an amount proportional to the fraction of their taxable value.
Some properties may be partially exempt:
- Woods, forests, shares in forestry groups
- Rural properties let under long-term leases
Filing your return
If you have an internet connection at home, you are now required to file online. If not, you can use a paper form.
If you have income to declare:
- Form no. 2042 IFI K (pre-filled) or 2042 IFI, appended to overall income return no. 2042, after checking box ØIF on page 1 of return no. 2042
If you do not have income to declare (no income from French sources):
- Form no. 2042 IFI SK (pre-filled) or 2042 IFI, appended to return no. 2042 IFI COV, after checking box 9GN on page 1 of return no. 2042 IFI
If you reside outside France (and outside the European Economic Area) and own property in France, the tax authorities may ask you to appoint a representative in France to receive correspondence concerning wealth tax assessment, collection and disputed claims.
UPDATED DINR-PART on AUGUST 27, 2021