Calculation of the real estate wealth tax (IFI)
Verified 21 May 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Do you have a sizeable real estate portfolio? You have to pay real estate wealth tax (IFI) if the net worth of that assets exceeds €1 300 000. The IFI is calculated by applying a progressive scale to the net taxable real estate assets. One discount is provided for assets not exceeding a certain threshold. The IFI is capped after potential tax cuts. We present you with the information you need to know.
L'IFI: titleContent is calculated on the net worth of your taxable assets to 1er january 2024, i.e. after deduction of debts existing at that date, provided that they can be justified.
The debts relate to the assets which constitute the assets taxable on 1er January.
If the real estate is owned by a business, the debts of the business can be deducted only for their share relating to real property.
It may be a debt related to the following:
- Acquisition of taxable property or rights in immovable property (immovable property borrowings)
- Improvement, construction, reconstruction or expansion work
- Acquisition of shares, in the amount of the value of the taxable property and immovable property
- Maintenance work owed by the landlord, or paid by the landlord on behalf of the tenant but for which he was unable to obtain reimbursement by December 31 of the year of departure of the tenant
- Payment of taxes due on the properties concerned (e.g. property tax or inheritance tax)
In contrast, the occupant's taxes are not deductible (e.g., housing tax).
The part of your tax corresponding to your real estate income is also not deductible (property income for example).
You can estimate the amount of the IFI you will have to pay with the following simulator:
Real estate wealth tax simulator (IFI)
The IFI is calculated on the value of your taxable net wealth using the following scale:
Share of net taxable value of assets | Applicable rate |
|---|---|
Up to €800,000 | 0% |
Enter €800,001 and €1 300 000 | 0.50% |
Enter €1,300,001 and €2,570,000 | 0.70% |
Enter €2,570,001 and €5 000 000 | 1% |
Enter €5,000,001 and €10 000 000 | 1.25% |
Greater than €10 000 000 | 1.50% |
Warning
The IFI scale starts from €800,000, but the tax threshold for the IFI is €1 300 000.
If you are declaring a balance sheet with a value between €1 300 000 and €1,400,000, you are entitled to a discount which is deducted from the amount of your IFI.
The amount of the haircut is calculated on the basis of the net taxable value of the assets.
The formula for calculating the valuation haircut is as follows: €17,500 - 1.25% the net taxable value of the assets.
Example :
Net assets taxable at 1er January 2024: €1,350,000
Raw Ifi = (€500,000 x 0.5%) + (€50,000 x 0.7%) = €2,500 + €350 = €2,850
Applicable haircut = €17,500 - (€1,350,000 x 1.25%) = €625
IFI Amount = €2,850 - €625 = €2,225
You can benefit from a IFI discount when you make donations to general interest organizations.
The reduction in IFI is equal to 75% donations made, up to €50,000.
If you are domiciled in France for tax purposes, you may benefit from the IFI cap.
The cap is a tax reduction that applies when the current year's IFI plus taxes due in France and abroad on income of the previous year is greater than 75% of the accumulation of your income from the previous year.
If you are in this situation, your IFI of the year, calculated according to the scale, will be reduced by the amount of the difference between the 2 cumulative amounts.
Example :
IFI calculated for 2024: €1,000
Taxes due in France and abroad on 2023 income: €7,000
2024 IFI Cumulation and 2023 Global Income Taxes Due: €8,000
2023 Global Revenue Rollup: €10,000
2023 IFI and income taxes due year to date equal to 80% of the year 2023's cumulative global revenues
You can take advantage of the capping system.
The reduction is the difference between 75% and 80% the combination of your 2023 global revenues, either 5% of €10,000, which makes €500.
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