Calculating the French Real Estate Wealth Tax (IFI)
The IFI applies to individuals whose net real estate assets exceed €1,300,000 on January 1 of the tax year. It’s levied using a progressive scale on your taxable property value, with a special discount (“décote”) for estates between €1.3 M and €1.4 M. After any eligible reductions, the total IFI due may also be capped. Below is an overview of the key rules.
Taxable Assets and Deductible Debts
Your IFI base is the net value of your real estate holdings—market value minus supporting debts—on January 1, 2025. You must substantiate any loan or mortgage balances you deduct.
Debts tied directly to taxable properties (e.g., purchase loans, renovation or expansion financing) are deductible.
If a company owns real estate, you may only deduct the company’s debt proportionate to its real estate assets.
Maintenance expenses you paid but have not been reimbursed by tenants by December 31 are also deductible.
Note: Occupant taxes (e.g., residence tax) and ongoing rental income taxes are not deductible. You can find full details on deductible items at the official government site: Service-Public – IFI details (external link).
Applying the Progressive IFI Scale
Once you have your net taxable property value, apply the following progressive rates:
| Net Taxable Value (€) | Rate |
|---|---|
| Up to 800,000 | 0 % |
| 800,001 – 1,300,000 | 0.50 % |
| 1,300,001 – 2,570,000 | 0.70 % |
| 2,570,001 – 5,000,000 | 1 % |
| 5,000,001 – 10,000,000 | 1.25 % |
| Above 10,000,000 | 1.50 % |
Reminder: Although the scale starts at €800,000, you only become liable once your net wealth exceeds €1,300,000.
The IFI Discount (“Décote”)
If your net real estate assets fall between €1,300,000 and €1,400,000, you qualify for a fixed discount from the gross IFI:
Example:
Net taxable value: €1,350,000
Gross IFI = (500,000 × 0.5 %) + (50,000 × 0.7 %) = €2,500 + €350 = €2,850
Discount = €17,500 – (1.25 % × €1,350,000) = €625
Net IFI owed = €2,850 – €625 = €2,225
Tax Reductions for Charitable Donations
Donations to approved public-interest organizations can reduce your IFI by 75 % of the amount given, capped at €50,000 per year.
Plafond Mechanism (Capping the IFI)
If your total tax burden (IFI plus all income taxes paid in France and abroad for the previous year) exceeds 75 % of your global income, you can invoke the capping rule. Your IFI liability is reduced by the difference between:
(IFI + prior-year global income taxes)
75 % of your prior-year global income
Example:
IFI for 2025: €1,000
2024 income taxes paid in France & abroad: €7,000
Total = €8,000 (which is 80 % of €10,000 global income)
Excess over 75 % = 5 % of €10,000 = €500
New IFI due = €1,000 – €500 = €500
