A non-resident who holds more than €1.3 million of net taxable French real estate on 1 January can be liable to France's impôt sur la fortune immobilière, or IFI. The test applies to French property even when the owner, salary and main home are in Britain. That is the position set out by France's tax administration.
The surprise is rarely caused by one ordinary apartment. It arrives when a family adds a chalet to a city flat, repays a large mortgage, inherits a share or buys through a company whose assets are mainly property. Rising equity can move an owner across the line even though nothing was sold and no rent increased.
This is a planning article, not personal tax advice. Ownership structure, treaty residence, debt terms and business use can change the result. The worked figures below isolate the mechanics so buyers know when to ask a French tax adviser for a calculation.
The threshold is net, but the scale starts lower
No IFI return is due when net taxable property is €1.3 million or less. Once the value exceeds that threshold, the progressive calculation starts at €800,000, not €1.3 million. The official 2026 rate table is 0% to €800,000, 0.5% from €800,000 to €1.3 million, 0.7% to €2.57 million, 1% to €5 million, 1.25% to €10 million and 1.5% above €10 million.
A discount softens the cliff for net taxable wealth between €1.3 million and €1.4 million. It does not turn the threshold into a personal allowance. That distinction matters when buyers make rough calculations by subtracting €1.3 million from the portfolio and applying one rate to the balance.
IFI is a household tax with its own household definition. Spouses, civil partners and cohabiting couples may be assessed together, while an adult child can be separate. Do not assume the income-tax filing arrangement produces the same perimeter.
What a non-resident normally puts in the frame
A non-resident is generally concerned with French-situated real estate held directly and the French property component of relevant companies or funds held indirectly, subject to exemptions and treaty provisions. The family home in Surrey is not simply added to the French base because the owner is British. The Alpine apartment is.
Direct ownership is straightforward to identify. Company ownership needs a look-through calculation. Shares are not outside IFI merely because the title at the land registry belongs to a company. The taxable fraction can reflect the value of French property inside the entity, with detailed rules and exclusions.
Professional-use exemptions are narrow and factual. Calling a chalet an investment does not make it a professional asset. A season of furnished holiday letting is not automatically equivalent to a qualifying operating business for IFI.
Structures should be reviewed before purchase rather than after the portfolio has crossed the threshold. A French property company can help with governance or succession while leaving the underlying real estate within IFI. Conversely, a genuinely commercial asset may produce a different analysis. Tax treatment follows the legal and economic facts, not the label on the holding vehicle.
Value is fixed on 1 January
The valuation date is 1 January of the tax year. Owners need a supportable open-market value at that date, not the original purchase price and not an optimistic portal estimate. Recent comparable sales, notarial data, local agency evidence and the property's actual condition all help.
A new-build price can be evidence, but specification, floor, view, parking, delivery status and VAT position affect comparability. Domosno's resort guide-price tables are useful market context. They are not individual valuations. In Saint-Gervais-les-Bains, for example, Domosno's Q3 2026 new-build snapshot covered 12 priced listings from €319,000 to €520,000, averaging about €5,700 per m². That range cannot value a specific penthouse without its area and attributes.
Keep the evidence used each year. IFI is self-assessed, and a rounded number becomes easier to defend when it is tied to dated comparables and a written method.
Valuation discounts for minority interests, occupation or illiquidity are technical matters. They are not automatic coupons. A jointly owned chalet still has a market; a company share still represents assets. Any discount should have a reason, evidence and consistency from one year to the next.
Debt can reduce the base, with conditions
France's 2026 guidance says a deductible debt must exist and be certain on 1 January, be borne by a member of the IFI household and relate to a taxable property asset. An acquisition mortgage is the obvious example. Certain unpaid repair, improvement, construction, property-tax and copropriété liabilities can also qualify.
The full list and limitations are described by impots.gouv.fr. Interest-only loans, family loans, company debt and refinancing deserve specific advice. The name “mortgage” is not enough; purpose, borrower, security and repayment profile matter.
Large portfolios face a debt cap. Where taxable assets exceed €5 million and deductible debt exceeds 60% of that value, the excess debt is generally only half deductible, subject to the statutory exceptions. This prevents a heavily leveraged portfolio from erasing the base mechanically.
Two €1.6 million owners, two outcomes
Owner A has a French Alpine portfolio worth €1.6 million and an acquisition mortgage of €500,000 outstanding on 1 January. Ignoring other adjustments, net taxable property is €1.1 million. That is below the €1.3 million filing threshold, so no IFI is due on this simplified case.
Owner B holds the same €1.6 million property without debt. The simplified progressive calculation is €2,500 on the €500,000 slice from €800,000 to €1.3 million, plus €2,100 on the €300,000 slice from €1.3 million to €1.6 million. The indicative IFI is therefore €4,600, before any reduction, credit or special rule.
The property values are identical. Equity creates the difference. If Owner A repays €100,000 of principal each year while values stay flat, the household can move into IFI without making another purchase. Mortgage repayment remains economically positive; it simply changes the tax balance sheet.
A British owner still has two tax systems
IFI is French property wealth tax. It is separate from French income tax on rent, French capital-gains tax on sale and the UK taxation of a UK resident's worldwide income and gains. A double-tax treaty may allocate rights or provide relief, but it does not convert four taxes into one annual bill.
For British residents, HMRC generally expects overseas property income to be declared under UK rules. French furnished-letting depreciation that suppresses French taxable profit is not simply imported into the UK computation. That is why a French tax-free rental result can coexist with a UK liability. The previous Domosno comparison of direct and company ownership explores that cross-border issue; the IFI calculation should still be run separately.
Keep four schedules: asset values, debt, annual rental income and acquisition cost. Combining them in one spreadsheet tends to hide which country and tax each number belongs to.
Domosno's current new-build listings quote purchase prices inclusive of French VAT. For IFI, a later open-market valuation is required. Neither the original VAT-exclusive developer price nor the mortgage valuation should be carried forward indefinitely as the tax value.
Run the test before adding the next property
List every French property interest held by the IFI household. Add an evidenced 1 January value, ownership percentage and qualifying debt. Include indirect holdings for review rather than assuming they are excluded. Then stress the values upward and the debt downward for the next five years.
A buyer with €900,000 of net French property who plans a €500,000 cash purchase is not buying “below the threshold”. The combined simplified base would be €1.4 million. A buyer with the same assets and a properly structured €300,000 acquisition loan may be in a different position. Tax should not dictate the purchase, but it belongs in the carrying-cost forecast.
Review the calculation each December, while there is time to gather balances and valuation evidence for 1 January. Record accrued works liabilities and property taxes that may qualify, but do not deduct a hoped-for renovation budget. A debt must satisfy the statutory conditions; a future intention is not a balance-sheet liability.
The official 2042-IFI page provides the 2026 form and filing route. Before committing to a second Alpine property or changing the debt, obtain advice on the actual household and structure. Domosno can provide current property and guide-price evidence and introduce the relevant legal and tax specialists; contact us to frame the question before the reservation is signed.
