La management French law includes several taxes, including the Real Estate Wealth Tax (IFI). It came into effect with the finance law Since 2018, the IFI has replaced theSolidarity tax on wealth (ISF). Its main distinction lies in its tax base, now restricted to only heritages real estate. If movable property (such as securities) and real estate were taken into account for the wealth tax, movable assets, considered more likely to be reinvested in the economy, are no longer taxable under the wealth tax.
All tax households In France, those who own real estate assets with a net taxable value exceeding 1,3 million euros are subject to the Real Estate Wealth Tax.
To realize the tax calculation and find out if you owe it, and if so, how much, discover which assets must be declared for the purposes of the IFI (French Wealth Tax). The use of a simulator An online search can also give you an initial estimate.
What should the IFI declaration contain?
What assets are subject to the IFI (French wealth tax)?
All real estate assets and rights held by members of the tax household on January 1st of the tax year must be declared on a specific form. Appendix 2042-IFI, along with the annual income tax return. The Deadlines Declaration requirements vary each year depending on the department of residence, so it is crucial to monitor them.
The assets in question may be held directly by their owner, or indirectly, through shares in real estate companies (SCI or SCPI).
Therefore, the following assets must be included in your IFI declaration :
- houses, apartments and their outbuildings;
- buildings classified as historical monuments;
- buildings under construction on January 1st of the tax year;
- undeveloped properties (building plots, agricultural land, etc.);
- buildings or parts of buildings held via shares in companies (SCI, SCPI, OPCI) and shares in real estate companies;
- real estate rights, and in particularusufruct of a property. As a general rule, it is the usufructuary who must declare the value of the property in full ownership.
The net taxable value corresponds to the sum of the market value of each asset, less deductible expenses (certain debts and liabilities related to taxable assets). The IFI tax rate is progressive and varies from 0,5% to 1,5% depending on the value of the assets.
What assets are exempt from the IFI (French wealth tax)?
Some properties benefit from a total or partial exemption. These schemes, sometimes considered as tax loopholesThese measures help to reduce the tax burden. If the main residence is not held by a property management company (SCI de gestion), it benefits from a 30% reduction on its market value as of January 1st.
Furthermore, real estate assets and rights used for a main professional activity are totally exempt from the IFI.
As such, certain rural properties rented under long-term leases or transferable leases, as well as shares in non-operating agricultural land groups (GFA), may be totally exempt from IFI if the property is used for the tenant's main activity and the tenant is a member of the landlord's family.
Woodlands, forests, and shares in forestry groups may be eligible for a partial exemption from the French wealth tax (IFI) of up to 75%, subject to strict sustainable management conditions. These exemptions may have an impact within the framework of the transmission of heritage and Team droits of succession.
Declare your donations to reduce your tax bill
The IFI (French wealth tax) return is also the time to showcase your generosity. Indeed, tax relief through donations is a powerful tool. Donations made to charities or foundations recognized as serving the public interest must be included in your tax return. These payments entitle you to a tax reduction on your IFI equal to 75% of the donation amount, up to a limit of €50,000 per year. This measure represents one of the most significant tax reductions available to those liable for the IFI.
Donations taken into account are those made between the filing deadline for the previous year's tax return and the filing deadline for the current year.
The Pasteur Institute of Lille, a private, non-profit foundation dedicated to fighting disease and recognized as a public benefit organization since 1898, is authorized to receive tax-deductible donations. These donations represent 85% of the foundation's resources and constitute essential support for our research teams who work daily to offer a better future to people affected by the disease.
Once your donation has been made, you will receive a tax receipt within 48 hours, which you should keep and present to the tax authorities in case of an audit.
