A British reader who owns a flat in Paris, a cottage in the Dordogne and perhaps a small studio let to students can easily hold more than 1.3 million euros of French bricks without feeling wealthy. In France that figure matters, because above it an annual tax wakes up that has no equivalent in Britain: the impôt sur la fortune immobilière, universally shortened to IFI, the tax on property wealth. It replaced the old general wealth tax, the impôt de solidarité sur la fortune, on 1 January 2018, and it taxes only one thing, the net value of your property assets, but it taxes it every year. Brexit changed nothing about who is caught: liability depends on tax residence and on owning French property, never on holding a British passport. A British citizen living in Lyon is taxed on worldwide property, while a British citizen living in London is taxed only on French property, and a British family newly arrived in France benefits for a time from a special five-year shelter. This guide explains, entirely from the statutes and judgments in force, whether IFI catches you, which properties count and at what value, how the bill is worked out, and how to challenge an assessment that is wrong. Every French term is explained the first time it appears.

I. Are you caught by IFI: the 1.3 million euro threshold after Brexit

A. British residents, newcomers and non-residents: who pays on what

The starting point is the article that creates the tax. Article 964 of the Code général des impôts, the French general tax code, provides: “Il est institué un impôt annuel sur les actifs immobiliers désigné sous le nom d’impôt sur la fortune immobilière.” An annual tax on property assets, assessed every year, with no upper age limit, no nationality condition and no Brexit exemption. The same article sets the trigger: “lorsque la valeur de leurs actifs mentionnés à l’article 965 est supérieure à 1 300 000 €”. Below or exactly at 1.3 million euros of net taxable property, nothing is due. Above it, the whole machinery starts, although, as shown below, the rate scale and a special discount soften the entry.

For a British citizen whose domicile fiscal, or tax home, is in France, the rule is worldwide. Article 964 taxes “Les personnes physiques ayant leur domicile fiscal en France, à raison de leurs actifs mentionnés au même article 965 situés en France ou hors de France.” A British resident of Bordeaux, Toulouse or Paris must therefore add up everything: the French main home, the French holiday cottage, but also the London flat kept for the children, the villa in Spain and the shares in a property company that represent buildings. Everything is assessed on the same date, because “Les conditions d’assujettissement sont appréciées au 1er janvier de chaque année.” A sale completed on 20 December removes the property from the following year’s base; a purchase completed on 2 January leaves it out for one more year. The 1 January photograph governs.

New arrivals get a shelter that many British movers do not know about. Taxpayers who take up French tax residence after at least five calendar years of non-residence are taxed, for a time, as if they were still non-residents, meaning only their French property counts. The statute says: “les personnes physiques mentionnées au premier alinéa du présent 1° qui n’ont pas été fiscalement domiciliées en France au cours des cinq années civiles précédant celle au cours de laquelle elles ont leur domicile fiscal en France ne sont imposables qu’à raison des actifs mentionnés au 2°.” That shelter runs “jusqu’au 31 décembre de la cinquième année qui suit celle au cours de laquelle le domicile fiscal a été établi en France”. A British family that moves to France in 2026 after decades in Kent therefore leaves its English house outside IFI until 31 December 2031, while its French house is caught from the start. Readers should note that this five-year rule is expressly written for IFI in Article 964 itself, which is the only basis relied on here.

British citizens who stay resident in the United Kingdom are caught only on their French footprint. Article 964 taxes “Les personnes physiques n’ayant pas leur domicile fiscal en France, à raison des biens et droits immobiliers mentionnés au 1° de l’article 965 situés en France et des parts ou actions de sociétés ou organismes mentionnés au 2° du même article 965 , à hauteur de la fraction de leur valeur représentative de ces mêmes biens et droits immobiliers.” The London home, the British portfolio and the Spanish apartment are invisible to IFI; the Paris flat, the Provençal farmhouse and the shares in the family société civile immobilière, the French family property company universally called the SCI, are visible, the shares only up to the fraction representing French buildings. Non-residence is no invisibility cloak for French bricks, and the courts confirm the pattern across French property levies: in a decision of 13 March 2026 concerning Swiss residents letting a furnished villa in France, the Conseil d’État, the supreme court for tax disputes, held that “Constituent des revenus d’immeubles au sens de ces dispositions les loyers issus d’immeubles situés en France, quelle que soit la catégorie d’imposition dont ils relèvent.” before ruling “Article 1er : Le pourvoi de M. et Mme A… est rejeté.” That case concerned the solidarity levy on rental income rather than IFI itself, and it is cited here only for what it says: owners outside France remain inside the French tax net for what their French property yields or represents.

Two household points complete the liability picture. First, couples are taxed together: married couples are jointly assessed, and so are partners in a pacte civil de solidarité, the registered civil partnership known as PACS, and partners in a stable openly acknowledged cohabitation, the concubinage notoire. Each partner’s properties are pooled against the single 1.3 million euro threshold, which means two British partners each owning 800,000 euros of French property are caught together although neither would be caught alone. Second, children’s property can be pulled in: the base includes property belonging to minor children where the parents hold legal administration of it, as Article 965 states and as developed below. A British couple that puts a French flat in a child’s name without understanding this rule gains nothing for IFI.

B. Which French properties count and at what value

Once liability is established, the question becomes what goes into the scales. Article 965 of the tax code defines the base: “L’assiette de l’impôt sur la fortune immobilière est constituée par la valeur nette au 1er janvier de l’année”. Two words carry the whole method. Assiette means the taxable base, the pile of values to which the rate scale is applied. Valeur nette means net value: the market value of each taxable asset minus the debts that the statute allows to be deducted, which are examined below. And the pile expressly includes “1° De l’ensemble des biens et droits immobiliers appartenant aux personnes mentionnées à l’article 964 ainsi qu’à leurs enfants mineurs, lorsqu’elles ont l’administration légale des biens de ceux-ci”. Houses, flats, building land, shares in building plots, usufructs and bare ownerships, all count, including property legally owned by a minor child where the parents administer it.

Valuation follows the death-duty rules, with one famous softener for the family home. Article 973 provides that market value is assessed under the inheritance-tax valuation rules, then adds: “un abattement de 30 % est effectué sur la valeur vénale réelle de l’immeuble lorsque celui-ci est occupé à titre de résidence principale par son propriétaire.” An abattement is a flat-rate reduction: a Paris flat genuinely occupied as the owner’s main home and worth 1 million euros enters the base at 700,000 euros. Only one property per jointly taxed household can benefit, since “En cas d’imposition commune, un seul immeuble est susceptible de bénéficier de l’abattement précité.” Holiday homes, second flats and let properties never qualify. British owners should understand that this 30 per cent reduction is the single most valuable line on many IFI returns, and also the most audited: the administration checks electricity consumption, electoral registration, school enrolment and family organisation before accepting that a Dordogne cottage is really the résidence principale.

Debts genuinely tied to taxable property reduce the base. Article 974 allows the deduction of “Sont déductibles de la valeur des biens ou droits immobiliers et des parts ou actions taxables les dettes, existantes au 1er janvier de l’année d’imposition, contractées par l’une des personnes mentionnées au 1° de l’article 965 et effectivement supportées par celle-ci, afférentes à des actifs imposables et, le cas échéant, à proportion de la fraction de leur valeur imposable”. The outstanding capital of the mortgage taken out to buy the Provençal house is deductible; the loan taken out to buy British shares is not; a loan from a relative counts only if it is real, documented and still owed on 1 January. The statute then refines the mechanics for interest-only loans and family loans in the paragraphs that follow, which is why large borrowings inside family arrangements need paperwork rather than handshakes. Practical consequence: a British buyer who borrows 400,000 euros to acquire a 1.6 million euro Paris flat starts with a net base of 1.2 million euros and stays outside IFI until repayments or rising prices push the net figure over the threshold.

Property used for a real business is left out altogether. Article 975 exempts “Sont exonérés les biens ou droits immobiliers mentionnés au 1° de l’article 965 et les parts ou actions mentionnées au 2° du même article 965 représentatives de ces mêmes biens ou droits, lorsque ces biens ou droits immobiliers sont affectés à l’activité principale industrielle, commerciale, artisanale, agricole ou libérale des personnes mentionnées au 1° dudit article 965.” A British artisan whose workshop in Lyon, a British farmer whose vines in the Languedoc, or a British doctor whose surgery in Paris is genuinely the seat of a main professional activity holds that property outside IFI. The exemption demands a real, main, professional activity, not a label: a gîte business run at arm’s length through a company rarely qualifies the owner personally, while a sole-trader craft workshop usually does.

Shares follow a look-through rule that matters enormously to British families. Where the French property is held through an SCI, the shares are taxable up to the fraction representing the buildings, exactly as Article 964 states for non-residents and Article 965 extends generally. British readers who bought through a family SCI will find the full mechanics, the tax treatment of the company and the succession consequences in the companion guide to buying and holding French property through a société civile immobilière. One boundary deserves attention: holdings below 10 per cent in companies carrying on a genuine industrial, commercial, craft, agricultural or professional activity are disregarded, since “Ne sont pas prises en compte les parts ou actions de sociétés ou d’organismes mentionnés au même premier alinéa qui ont pour activité une activité industrielle, commerciale, artisanale, agricole ou libérale dont le redevable détient directement et, le cas échéant, indirectement, seul ou conjointement avec les personnes mentionnées au 1°, moins de 10 % du capital et des droits de vote.” A small portfolio stake in a listed French property developer is therefore ignored, while the family’s 100 per cent of its SCI is fully looked through. Readers whose property sits behind an English trust rather than a company face a different disclosure regime, set out in the guide to British family trusts and French tax, and should not confuse the two vehicles.

II. How much you owe, how to declare and how to challenge the bill

A. Rates, discount, cap and charity reduction: working out the figure

The rate scale of Article 977 is progressive by slices, and the statute opens with the words “Le tarif de l’impôt est fixé à”. The slices are: nothing up to 800,000 euros; 0.50 per cent from 800,000 to 1,300,000 euros; 0.70 per cent from 1,300,000 to 2,570,000 euros; 1 per cent up to 5 million; 1.25 per cent up to 10 million; and 1.50 per cent above. In the statute’s own compressed wording: “N’excédant pas 800 000 € 0 Supérieure à 800 000 € et inférieure ou égale à 1 300 000 € 0,50 Supérieure à 1 300 000 € et inférieure ou égale à 2 570 000 € 0,70 Supérieure à 2 570 000 € et inférieure ou égale à 5 000 000 € 1 Supérieure à 5 000 000 € et inférieure ou égale à 10 000 000 € 1,25 Supérieure à 10 000 000 € 1,50”. Only the slice above each line is taxed at the higher rate, exactly like income tax. A net taxable estate of 1.5 million euros therefore pays 2,500 euros on the 500,000 euro slice between 800,000 and 1,300,000, plus 1,400 euros on the 200,000 euro slice above 1,300,000, a total of 3,900 euros before any relief.

Just above the threshold, a special discount, the décote, smooths the entry so that owning one euro too many does not cost a fortune. The statute provides that “le montant de l’impôt calculé selon le tarif prévu au tableau du 1 est réduit d’une somme égale à 17 500 €-1,25 % P, où P est la valeur nette taxable du patrimoine.” Take a net estate of 1.35 million euros: the scale gives 2,850 euros, the discount equals 17,500 minus 1.25 per cent of 1,350,000, which is 625 euros, and the tax falls to 2,225 euros. The discount applies only between 1.3 and 1.4 million euros and fades to nothing at the top of that band, which is precisely its purpose.

Two further reliefs can shrink the bill. The first is the cap, the plafonnement, which protects French residents whose property wealth dwarfs their income. Article 979 provides that “L’impôt sur la fortune immobilière du redevable ayant son domicile fiscal en France est réduit de la différence entre, d’une part, le total de cet impôt et des impôts dus en France et à l’étranger au titre des revenus et produits de l’année précédente” and “75 % du total des revenus mondiaux nets de frais professionnels de l’année précédente”. In plain terms, IFI plus the previous year’s income taxes cannot together exceed 75 per cent of the previous year’s worldwide net income, and the excess IFI is rebated. The Conseil d’État polices this cap strictly: ruling on 31 March 2021 on the official commentary explaining Article 979, it examined the paragraphs by which the minister had, in the court’s words, “fait connaître son interprétation des dispositions de l’article 979 du code général des impôts relatives au plafonnement de l’impôt sur la fortune immobilière (IFI)”, and it dismissed the challenge, holding “Article 1er : La requête de M. et Mme B… et autre est rejetée.” For a British retiree in France living on a modest pension inside a valuable house owned outright, this cap is often the provision that halves or wipes out the bill, but it must be computed and claimed, it is never automatic.

The second relief rewards generosity. Article 978 allows the taxpayer to set against IFI part of gifts to research bodies, recognised public-interest foundations, universities and similar organisations: “Le redevable peut imputer sur l’impôt sur la fortune immobilière, dans la limite de 50 000 €, 75 % du montant des dons en numéraire et dons en pleine propriété de titres de sociétés admis aux négociations sur un marché réglementé français ou étranger effectués au profit” of the listed bodies. Seventy-five per cent of the gift reduces the tax, up to 50,000 euros of reduction. A 10,000 euro cash gift to an eligible French medical research foundation therefore cuts IFI by 7,500 euros, provided the receipt, the reçu fiscal, is kept with the return.

A word for Paris and the Île-de-France, where many British owners are concentrated. Nothing in the IFI rules is Paris-specific, but Paris prices make the threshold bite earlier: a two-bedroom flat in the 7th arrondissement plus a modest country cottage routinely exceeds 1.3 million net, especially once the mortgage is repaid. Owners in the capital should therefore value with particular care, keep the estate agent appraisals and notarial comparables that support the 1 January figure, and remember that the 30 per cent main-home reduction described above is worth hundreds of thousands of euros of base in Parisian terms. Where the property is let, the rent roll and the tenancy agreements also serve twice: they evidence value and they feed the income side of the cap computation.

B. Declaring on the tax return and challenging an unfair assessment

IFI is declared, not assessed out of the blue. Taxpayers report the figures on their annual income tax return, since “Les redevables mentionnent la valeur brute et la valeur nette taxable des actifs mentionnés à l’article 965 sur la déclaration annuelle prévue à l’article 170 .” Both the gross and the net taxable values must be shown, with schedules detailing each asset, following the model forms issued by the administration. A British resident files the IFI schedules with the yearly déclaration des revenus; a British non-resident with French property above the threshold files too, reporting only the French base. The valuation date remains 1 January of the tax year, as Articles 964 and 965 state and as quoted above, so the return filed in the spring of one year photographs the wealth held on the previous New Year’s Day. Debts must have existed on that same 1 January, which means a mortgage signed in February cannot help for that year’s IFI, however genuine it is.

Most losing battles are lost on evidence, not on law. The administration accepts a valuation it can check and challenges one it cannot, so the file should contain, for each property, at least two recent agency appraisals or, better, the price per square metre of comparable sales recorded by the notarial databases for the same street and quarter, adjusted for condition, floor and outlook. Photographs of defects, quotes for structural work and the surveyor’s report support a discount for a house in poor repair. For the 30 per cent main-home reduction, the bundle should prove real occupation: energy bills across the winter months, home insurance in the owner’s name, registration on the electoral roll where possible, children’s school certificates and a coherent story across the two countries, because a British owner who claims a Paris flat as the main home while the whole family demonstrably lives in Surrey will fail. For debts, keep the loan offer, the amortisation table showing the capital still owed on 1 January, and the bank statements proving the borrower actually bears the payments. For SCI shares, keep the company’s balance sheet identifying the buildings and the fraction they represent. For gifts, keep the receipt. For the cap, keep the previous year’s worldwide income proofs, including the British P60, the pension statements and the French assessment notices, since the 75 per cent test runs on worldwide income.

Where the assessment is wrong, the remedy is the formal claim, the réclamation contentieuse. The procedure belongs to the contentious jurisdiction, the branch of tax litigation in which the judge can discharge or reduce the tax, because the statute assigns to it “Les réclamations relatives aux impôts, contributions, droits, taxes, redevances, soultes et pénalités de toute nature, établis ou recouvrés par les agents de l’administration, relèvent de la juridiction contentieuse lorsqu’elles tendent à obtenir soit la réparation d’erreurs commises dans l’assiette ou le calcul des impositions, soit le bénéfice d’un droit résultant d’une disposition législative ou réglementaire.” Typical winning grounds in IFI files are concrete: a property sold before 1 January still included, a debt omitted, the main-home reduction refused although the evidence proves occupation, an SCI fraction miscalculated, the cap not applied although the income test is met, or a partner’s or child’s property wrongly pooled. Each ground should name the article it relies on and attach its proof; a letter that merely says the bill feels too high is not a claim in the legal sense.

The claim must arrive in time, and the time limit is strict. Claims concerning taxes of this kind must reach the administration by 31 December of the second year following the year of collection or payment, since “Pour être recevables, les réclamations relatives aux impôts autres que les impôts directs locaux et les taxes annexes à ces impôts, doivent être présentées à l’administration au plus tard le 31 décembre de la deuxième année suivant celle, selon le cas : a) De la mise en recouvrement du rôle ou de la notification d’un avis de mise en recouvrement”. For IFI assessed on the 2026 return, that generally means 31 December 2028. The claim can be filed online through the secure messaging of the personal account on the impots.gouv.fr portal, which British non-residents can open and which produces a dated receipt, or by recorded-delivery letter to the tax centre shown on the notice, and the proof of filing must be kept: a missing proof of date is the most common fatal defect in these files.

If the administration rejects the claim expressly or stays silent, the dispute moves to the administrative tribunal. The action must be brought within two months of receiving the administration’s decision on the claim, since “L’action doit être introduite devant le tribunal compétent dans le délai de deux mois à partir du jour de la réception de l’avis par lequel l’administration notifie au contribuable la décision prise sur la réclamation”. Where no answer arrives, the taxpayer is not trapped: “le contribuable qui n’a pas reçu la décision de l’administration dans un délai de six mois mentionné au premier alinéa peut saisir le tribunal dès l’expiration de ce délai.” Six months of silence opens the door to the judge. Before the tribunal, the same evidence bundle is redeployed, this time with legal pleadings tying each figure to its article, and the judge can order discharge in whole or in part. British claimants litigate in French and from abroad without difficulty in routine IFI cases, the file being essentially documentary, although complex valuations benefit from an independent expert report commissioned early, before positions harden.

Conclusion

France’s IFI catches British owners by the value of their bricks, never by their passport. Living in France puts worldwide property into the base above 1.3 million euros, with a five-year shelter for newcomers that counts only French assets. Living in Britain puts only French property and the French fraction of company shares into the base. The base is net value on 1 January, softened by the 30 per cent reduction for a genuine main home, reduced by real property debts, cleared of property genuinely used for a main business, and looked through where an SCI or similar vehicle is used. The scale runs from 0.50 to 1.50 per cent with a discount at the threshold, a cap at 75 per cent of worldwide income for French residents, and a reduction for gifts to eligible bodies. The figures are declared each year on the annual return, and a wrong assessment is challenged by a reasoned claim reaching the administration by 31 December of the second following year, then by action before the administrative tribunal within two months of the answer, or after six months of silence. Value carefully, keep every proof, diary the deadline, and challenge in time: that discipline is what separates the British owner who simply pays from the British owner who pays exactly what the statute requires, and not a euro more.