IFI real estate wealth tax: A complete guide for taxpayers in 2025

The Real Estate Wealth Tax (IFI) is an essential subject for many taxpayers in France. Since its introduction in 2018, it has replaced the ISF and has focused only on real estate. But how exactly does it work in 2025? This guide helps you better understand the rules, exceptions, and strategies to optimize your taxation.

Key points

• The IFI has replaced the old ISF since 2018 and focuses only on real estate.
• It concerns net real estate assets in excess of 1.3 million euros.
• The main residence benefits from a 30% reduction on its value.
• Assets held via companies, such as SCPIs or SCPIs, are included in the tax base.
• Exemptions exist for professional goods and certain donations.
• The progressive IFI scale remains unchanged in 2025, with rates ranging from 0.5% to 1.5%.
• Taxpayers must declare their assets before a specific deadline.
• Strategies such as property dismemberment or donations make it possible to reduce the IFI.

What is IFI and its origin

Definition of IFI

Real Estate Wealth Tax (HERE) is a tax levy introduced in 2018 to replace the Solidarity Tax on Wealth (ISF). Unlike its predecessor, the IFI exclusively targets real estate, whether built or not built, owned in France or abroad. Financial assets, such as investments or securities, are completely excluded from its base.

Differences between IFI and ISF

The ISF, in force until 2017, taxed all taxpayers' net assets, including real estate and financial assets. The IFI, on the other hand, focuses only on the net value of real estate, thus reducing its scope of application. This reform aimed to ease the tax burden on financial investments to encourage their reinjection into the economy.

Objectives of the establishment of the IFI

In establishing the IFI, the government had several intentions:

1. Encourage investments in French businesses by excluding financial assets from taxation.
2. Reduce the phenomenon of fiscal exile of wealthy taxpayers.
3. Simplify the tax system by refocusing taxes on real estate, which is perceived as less mobile than financial assets.

Legislative developments since 2018

Since its establishment, the IFI has undergone few major changes. However, minor adjustments have been introduced to clarify certain points, such as the treatment of property held through companies or the rules for the valuation of primary residences. These changes were aimed at reducing ambiguities and ensuring better compliance with tax returns.

Impact on French taxpayers

The IFI has significantly reduced the number of tax households affected by this tax compared to the ISF. In 2024, only about 150,000 households were subject to the IFI, compared to more than 350,000 for the ISF in 2017. This has allowed many taxpayers to reorient their wealth strategies.

The IFI marked a break in French taxation, refocusing taxation on real estate and promoting financial investments.

Reasons for tax reform

The reform that led to the IFI was based on several observations:

• Financial assets are more volatile and essential to economic dynamism.
• The ISF was perceived as an obstacle to France's economic attractiveness.
• Targeted taxation on real estate seemed fairer and easier to control.

In short, the IFI reflects a paradigm shift in French taxation, with an emphasis on real estate while stimulating investment in businesses.

The properties concerned by the IFI

Taxable real estate

The real estate wealth tax (IFI) mainly targets real estate. This includes:

• Built buildings (houses, apartments, rental buildings).
• Unbuilt land (agricultural land, building land).
• Shares or shares of companies that own real estate, in proportion to the value of these assets.

Exclusion of financial assets

Unlike the old ISF, financial assets such as shares, bonds or savings accounts are excluded from the IFI. Only real estate or real estate rights are taken into account.

Rules for primary residences

The main residence benefits from a 30% reduction on its market value. To benefit from it:

1. The property must be occupied primarily by the owner.
2. No complex legal arrangement should mask the real use of the property.

Treatment of second homes

Second homes, whether used for vacations or rented occasionally, are fully taxable at their market value. No rebate is applied.

Assets held via companies

Real estate owned indirectly, for example via SCIs or SCPIs, are also subject to IFI. The taxable value is calculated in proportion to the taxpayer's participation in the company.

Special cases of goods abroad

Taxpayers residing in France must include real estate held abroad in their declaration. However, international tax treaties can avoid double taxation. For specific information, in particular on properties classified or under construction on January 1, 2025, consult our dedicated section hither.

Important note: Some goods may be partially or totally exempt depending on their nature or use. A precise analysis is therefore essential to optimize your declaration.

The IFI tax threshold in 2025

Coverage threshold amount

In 2025, the threshold for liability to the Real Estate Wealth Tax (IFI) remains fixed at 1,300,000 euros. This means that only taxpayers whose net real estate assets exceed this amount are affected. It is important to note that although this threshold is decisive for being subject to the IFI, tax calculation starts from 800,000 euros, according to the progressive scale in force.

Calculation of taxable net worth

To determine if you are liable for the IFI, it is necessary to assess the net taxable value of your real estate assets. This calculation takes into account:

• The value of all real estate owned directly or indirectly.
• Deductible debts, such as loans taken out to acquire or improve property.
• Specific allowances, such as that of 30% applicable to the main residence.

An accurate assessment is crucial to avoid any errors in your statement.

Rules for tax households

The IFI applies at the level of the fiscal household. This includes:

1. Married or civil union couples.
2. Notorious concubines.
3. Minor children attached to the home.

Each member of the tax household must therefore be taken into account in the overall valuation of assets.

Impact of matrimonial regimes

The spouses' marital regime may influence the IFI declaration. For example:

• In the event of separation of assets, each spouse declares only his share of assets.
• In community of property, all common goods are taken into account.

These specificities must be analyzed for a compliant declaration.

Real estate valuation

The valuation of real estate must be based on market value at January 1, 2025. This estimate can be made based on:

• Local market prices.
• Recent similar transactions.
• Real estate expertise if necessary.

An incorrect valuation may result in sanctions or tax adjustments.

Concrete calculation examples

Here are two examples to illustrate the tax threshold:

1. Total assets of €1,500,000:
2. Total assets of €2,000,000:

In summary, the IFI tax threshold in 2025 remains stable, but a rigorous assessment of taxable net worth is essential to avoid errors or disputes with the tax authority.

The IFI scale in 2025

Tax brackets

The IFI scale is based on a progressive system, divided into several brackets. This principle means that the tax rate increases according to the net taxable value of your real estate assets. Here are the brackets in effect for 2025:

Applicable rates per bracket

Each value bracket is subject to a specific rate. For example, if your net assets are valued at €2,000,000, the first part (up to €800,000) is not taxed, while the following brackets are subject to the corresponding rates.

Progressive tax calculation

The IFI is calculated progressively. This means that each bracket is taxed separately according to its rate. For example, for assets of €2,000,000, taxation is broken down as follows:

• 0% on the first €800,000
• 0.5% on the range of €800,001 to €1,300,000
• 0.7% on the range of €1,300,001 to €2,000,000

Therefore, the total tax payable would be the sum of the amounts calculated for each bracket.

Comparison with previous years

For 2025, the scale remains unchanged compared to 2024. This stability allows taxpayers to better plan their taxation. However, it is always advisable to check for any tax updates.

Simulation examples

Let's take two concrete examples:

1. A net taxable asset of €1,500,000 would result in a tax calculated as follows:
2. A net taxable asset of €3,000,000:

Impact of legislative changes

Although the scale remains stable, legislative adjustments may influence other aspects of the IFI, such as exemptions or reporting procedures. It is therefore essential to stay informed of possible reforms to avoid any fiscal surprises.

A good understanding of the scale is key to anticipate and optimize your tax. Take the time to accurately assess your assets and, if necessary, consult a tax expert.

Possible exemptions from the IFI

Fully exempt goods

Some real estate properties are entirely exempt from the IFI. Property used for a main professional activity are a common example. Here are some criteria for this exemption:

• The property must be used directly for the main activity of the taxpayer or a member of his tax household.
• The activity must be carried out in a usual, constant manner and be the main source of income.
• The property must be essential for this professional activity.

In addition, assets owned by non-profit organizations recognized as being of public utility, such as charitable associations, are also completely exempt.

Partially exempt goods

Some goods benefit from a partial exemption. For example:

• Woods and forests: 75% exempt provided they are managed sustainably over a period of at least 30 years.
• Shares in agricultural land groups (GFA): partially exempt if they concern agricultural properties rented on a long term basis.
• Rural property rented to a farmer: these properties also benefit from a specific allowance.

Conditions to benefit from an exemption

To take advantage of these exemptions, it is crucial to respect the following conditions:

1. Correctly declare the goods concerned in the IFI declaration.
2. Provide documents proving professional use or partial exemption criteria.
3. Respect the reporting deadlines and any sustainable management obligations (especially for woods and forests).

Exemptions for professional goods

Commercial, industrial or agricultural premises used for a professional activity are fully exempt. This also includes shares in companies that own these professional assets, under certain conditions.

Rules for donations and donations

Donations to organizations of general interest can reduce the tax base. These donations must be made to recognized structures, such as foundations or associations, to be taken into account.

Examples of common exemptions

Here are some practical examples:

• A doctor using part of his home as a doctor's office can get an exemption for that part.
• A forest that has been exploited sustainably for more than 30 years benefits from a reduction of 75%.
• The premises of a family business, if they are essential to the activity, are fully exempt.

In summary, knowing the possible exemptions from the IFI makes it possible to optimize the management of your real estate assets and to reduce your taxation in a legal and effective way.

The IFI statement

Reporting requirements

To declare the Real Estate Wealth Tax (IFI), you must include your real estate assets in the annual tax return. This declaration is mandatory for any taxpayer who exceeds the threshold of liability set at 1,300,000 euros. Since 2019, online reporting has been widespread, except for those who do not have access to the Internet. In this case, the paper form 2042-IFI must be completed.

Required documents

Here are the main documents you need to prepare:

• A detailed valuation of your real estate.
• Proof of deductible debts (real estate loans, property taxes, etc.).
• Statements of shares of real estate companies (such as SCIs or SCPIs).
• Form 2042-IFI or 2042-COV for special cases.

Deadlines for reporting

The deadlines for filing your IFI return coincide with those for income tax. Online, deadlines vary depending on your department, generally between May and June. If you opt for the paper format, the deadline is often set at the end of May.

Online or paper declaration

• On line : Accessible via your personal space on the tax site. It's fast and secure.
• Paper : For taxpayers without Internet access only. The form must be sent by post before the deadline.

Common mistakes to avoid

• Undervalue your real estate to reduce taxes.
• Forget to include certain assets owned through corporations.
• Not correctly deduct debts associated with taxable assets.
• Exceeding reporting deadlines, which results in penalties.

Penalties for non-declaration

In the event of non-reporting or inaccurate reporting, significant financial penalties may be applied. Increases can be up to 40% in the event of voluntary default and up to 80% in the event of proven fraud.

An accurate and timely declaration is essential to avoid complications with the tax administration.

The IFI payment

Accepted payment methods

To pay the Real Estate Wealth Tax (IFI), several options are available:

• Secure online payment: The most common and recommended method. All you have to do is fill in your bank details on the tax portal.
• Bank checks or cash: These methods are accepted only if the IFI amount is less than €300.
• Direct Debit: A practical option to avoid oversights, as long as you have set up this method in advance.

Payment deadline

The IFI payment must be made before a specific date, generally set in June of the tax year. For online payments, an additional period of a few days is often granted. Respecting this deadline is essential to avoid penalties.

Secure online payment

Online payment is accessible from your personal space on the tax site. Here are the steps:

1. Log in to your tax area.
2. Go to the “Pay my taxes” section.
3. Check the amount due and confirm the payment by entering your bank details.

Consequences of late payments

A delay in the payment of the IFI leads to surcharges:

• A penalty of 10% on the amount due.
• Late payment interest calculated daily.

To avoid these fees, it is advisable to opt for automatic debit or to pay your IFI as soon as you receive the tax notice.

Advance payment discounts

Although not well known, early payment can sometimes lead to tax discounts or benefits. This depends on the provisions in force for the year in question.

Refunds and adjustments

In some cases, a taxpayer may be required to receive a refund, especially in the event of an error in the initial declaration. For this, a request for correction must be sent to the tax authorities, accompanied by the necessary supporting documents.

Practical tip: Use an IFI simulator to estimate your amount due and plan your payment effectively.

Strategies to reduce IFI

Optimization of real estate debts

To reduce your IFI, one method is to optimize your real estate debts. Debts incurred for the acquisition, construction or renovation of taxable real estate can be deducted from the tax base. It is therefore crucial to properly document these debts and to check that they meet the eligibility criteria.

Use of the IFI cap

The IFI cap allows you to limit the tax due according to your income. This mechanism aims to avoid an excessive tax burden. If your taxes exceed 75% of your income, you can request an adjustment. This system requires a precise analysis of your income and tax burdens.

Investments in exempt funds

Some investment structures, such as Real Estate Investment Companies (SCPIs) or Real Estate Collective Investment Organizations (OPCIs), offer opportunities to reduce IFI. These funds make it possible to invest in real estate assets while benefiting from partial or total exemptions.

Dismemberment of property

Property dismemberment is an effective strategy for reducing IFI. By separating usufruct and bare ownership, only the value of usufruct is subject to IFI. This approach is particularly useful in the context of successions or donations.

Donations to organizations of general interest

Donating to organizations of general interest can reduce your IFI by up to 75% of the amount donated, up to a limit of €50,000. This strategy combines tax benefits with support for important causes.

Undivided purchase

Buying jointly can also be a solution to spread the tax burden. Each co-owner is taxed on his share, which can reduce the individual tax base.

Good planning and a rigorous evaluation of your assets are essential to maximize tax benefits and effectively reduce IFI.

IFI and main residence

Definition of primary residence

The main residence corresponds to the home where the taxpayer usually lives, generally more than eight months a year. It is the main place of family life, as defined on December 31 of the fiscal year concerned. A tax household can only designate one main residence.

30% reduction on the main residence

For the calculation of the IFI, the main residence benefits from a 30% reduction on its market value. For example, if the estimated value of a property is €1,000,000, only €700,000 will be taken into account in the tax base. This tax advantage aims to alleviate the burden for owners occupying their own homes.

Conditions for benefiting from the abatement

• The property must be occupied primarily by the owner.
• The rebate only applies to one property per tax household.
• Property owned indirectly through companies does not benefit from this allowance.

Treatment of separate residences

Married or civil union couples can, in exceptional situations, declare separate main residences. This requires justifying a significant geographical or professional separation.

Exclusion of second homes

Second homes, although they are places to live, do not benefit from the 30% discount. They are fully taken into account in the IFI's base.

Impact on IFI calculation

The 30% reduction on the main residence can significantly reduce the tax base, but it is essential to properly assess the market value of the property. An error in this estimate may result in tax penalties.

The main residence is a key element in calculating the IFI, offering a balance between taxation and the protection of family assets.

IFI and assets held via companies

Rules for SCPIs and SCI

Real Estate Investment Companies (SCPIs) and Real Estate Civil Companies (SCPI) are particularly concerned by the IFI. The shares held in these companies are taxable up to the fraction corresponding to the value of the real estate they own. This includes usufructs, rights of use or residence attached to these assets.

Treatment of shares

Shares or shares in companies that own real estate are also subject to IFI. However, only real estate assets are taken into account in the tax base. For example:

• If a company owns both real estate and financial assets, only the real estate portion will be taxed.
• Real estate allocated to the operational activity of the company is generally excluded.

Specific exemptions

Exemptions may apply in some cases. For example:

• If the real estate is used for the main professional activity.
• If you own less than 10% of the capital of a company that owns real estate.

Calculating the value of shares

To assess the taxable value of the shares, you must:

1. Determine the market value of real estate owned by the company.
2. Apply a pro rata based on the shareholding held.
3. Subtract debts associated with real estate.

Impact of associated debts

Debts related to real estate owned through companies are deductible, provided they are directly linked to these assets. This includes:

• Loans taken out for the acquisition or maintenance of goods.
• Mortgage debts still outstanding.

Legislative news

In 2025, adjustments were introduced to clarify the rules concerning property owned through companies. These changes aim to simplify reporting procedures while strengthening tax control. Taxpayers must now provide more detailed supporting documents when filing.

IFI news in 2025

Changes in the tax base

In 2025, The IFI tax base remains generally similar in previous years. However, minor adjustments have been introduced to clarify the treatment of certain assets held through specific structures, such as family SCIs. These changes aim to reduce legal ambiguities and simplify reporting procedures.

New tax ceilings

The coverage thresholds and the brackets in the schedule remain the same. The IFI continues to apply starting at €1,300,000 in net real estate assets, with a gradual calculation starting at €800,000. Although the scale remains stable, taxpayers should remain attentive to the valuation of their assets to avoid errors.

Impact of fiscal reforms

The government has introduced adjustments to strengthen fiscal transparency. These changes include better integration of foreign assets into declarations, as well as harmonization of rules for primary and secondary residences. These reforms aim to ensure fairness between taxpayers, whether residents or non-residents for tax purposes.

Changes for corporate assets

The shares of SCIs and SCPIs are subject to strengthened supervision. Now, the debts associated with these shares must be documented more rigorously to be deductible. The aim of this measure is to avoid abuses linked to the overvaluation of debts.

Changes in exemptions

Some partial exemptions, in particular for professional goods, have been revised. For example, the conditions for benefiting from an exemption on goods used for a professional activity have been specified, in order to limit divergent interpretations.

Consequences for taxpayers

In summary, the new features of the IFI in 2025 focus on clarifying the rules and strengthening controls. For taxpayers, this means increased vigilance when declaring and better preparation to avoid sanctions.

Although the changes are limited, they reflect a desire to improve the readability and fairness of the tax system.

Common mistakes to avoid with IFI

Undervaluation of real estate

Underestimating the value of your assets may seem like a way to reduce your taxes, but it can lead to serious penalties in the event of a tax audit. It is crucial to provide a realistic and justifiable estimate.. Remember to consult an expert to assess your assets if necessary.

Forgetting to declare certain assets

Forgetting or omitting certain real estate assets, whether in France or abroad, is a common mistake. This includes assets owned through companies or jointly owned. Be sure to properly identify all of your taxable assets.

Miscalculation of deductible debts

Debts related to your real estate, such as loans for acquisition, are deductible, but only under certain specific conditions. An error in this calculation may unduly increase your tax base. Only take into account debts that are still outstanding at January 1, 2025 and well justified.

Non-compliance with reporting deadlines

Failure to meet the deadlines for submitting your IFI declaration may result in financial penalties. Be sure to note the deadlines and prepare your documents in advance to avoid delays.

Confusion between exempt and taxable goods

Some goods, such as professional goods or forests, may be partially or completely exempt. Misclassification can cost you a lot. Carefully check the rules that apply to each type of property.

Mistakes in choosing the payment method

Finally, the method of paying your IFI can also be a problem. For example, late or incorrect payments may result in surcharges. Opt for secure online payment to avoid administrative errors.

An accurate and complete statement is your best defense against any disputes with the tax authorities. Take the time to check every detail before submitting your application.

IFI and international taxation

Rules for French tax residents

French tax residents are subject to the IFI on all of their real estate assets, whether located in France or abroad. However, bilateral tax treaties can avoid double taxation. For example, if a property is already taxed in the country where it is located, this taxation can be deducted from the IFI due in France.

Treatment of assets located abroad

Real estate abroad is included in the tax base of French tax residents. However, their value may be reduced by specific debts linked to these assets, such as loans taken out for their acquisition or renovation. It is essential to properly document these debts in order to report them correctly.

International tax treaties

International tax treaties play a key role in the avoidance of double taxation. They determine which country has the right to tax real estate. In general, the country where the property is located has priority, but France can apply a tax credit equivalent to the tax paid abroad.

Impact for expatriates

An expatriate remains subject to the IFI for his property located in France. On the other hand, his goods abroad are excluded from the tax base. This can significantly reduce the tax base, especially if a large part of the assets are located outside France.

Specific exemptions for non-residents

Tax non-residents are only taxed on their real estate located in France. Property held abroad is completely exempt. This can be a significant advantage for those who mainly own property outside France.

Tips for avoiding double taxation

1. Check if a tax treaty exists between France and the country where your assets are located.
2. Document any taxes already paid abroad to include in your return.
3. Consult a tax advisor to optimize your situation and avoid costly mistakes.

International taxation may seem complex, but with good planning, you can avoid paying twice for the same property. Take the time to understand the rules and take advantage of existing tax treaties.

The impact of IFI on wealth management

Reallocation of financial assets

Since the establishment of the IFI, taxpayers have been encouraged to review their wealth strategy. The exclusion of financial assets from the tax base has led many households to reorient their investments towards financial products such as shares or bonds, which are not subject to IFI. Some common reallocation examples include:

• Investments in the stock market.
• Investment funds not linked to real estate.
• Life insurance without a real estate component.

This strategy not only reduces taxes, but also diversifies investments.

Strategies to limit fiscal impact

To minimize the impact of the IFI, several options are possible:

1. Use the IFI cap : This system limits the total amount of direct taxes to 75% of the income of the fiscal household.
2. Optimizing deductible debts : Loans taken out for the acquisition of real estate can be deducted, under certain conditions.
3. Give preference to exempt goods : Professional properties or certain types of jointly owned properties are exempt from the IFI.

Consequences on real estate investments

With IFI's focus on real estate, some owners are choosing to sell real estate assets to invest elsewhere. On the other hand, those who maintain a significant real estate portfolio often have to review their financing and property valuation strategies.

Anticipating tax changes is crucial to avoid costly adjustments and maintain the profitability of your assets.

Role of wealth management advisors

Advisors play a key role in guiding taxpayers through this new tax situation. In particular, they help to:

• Accurately assess the value of real estate.
• Identify exemption opportunities.
• Develop strategies to optimize donations and successions.

Optimization of donations and successions

The IFI also has an impact on inheritance strategies. Early donations make it possible to reduce the tax base, while benefiting from specific exemptions. For example:

Examples of wealth strategies

Here are some concrete approaches to better manage the impact of IFI:

• Dismemberment of property : Transfer bare ownership to his heirs while maintaining the usufruct.
• Investments in exempt funds : For example, solidarity or ecological funds.
• Undivided purchase : Reduce the taxable value by sharing the property.

In conclusion, the IFI requires more thoughtful and dynamic asset management. Adapting your investment choices and anticipating tax changes are essential to limit its impact.

IFI and donations

Tax reduction thanks to donations

Donating to organizations of general interest is an effective strategy to reduce your IFI. You can benefit from a tax reduction of 75% of the amount of your donations, up to a limit of €50,000 per year. This means that a €10,000 donation can reduce your IFI by €7,500. However, it is important to note that this mechanism is separate from the 66% income tax deduction.

Conditions to benefit from the discounts

To be eligible, donations must be paid to associations or foundations recognized as being of public utility. These organizations generally work in areas such as:

• Scientific or medical research.
• Education and culture.
• Help for people in difficulty.

Donations to organizations located in the European Economic Area (EEA) may also be taken into account, provided they are recognized as being of public utility in their country of origin.

Donations to organizations of general interest

Donations can be directed to specific projects, such as the financing of research or the preservation of heritage. This not only reduces taxes, but also supports important causes.

Optimizing your IFI through donations is an approach that is both solidarity and fiscally advantageous, provided that you meet the eligibility criteria.

Impact on IFI calculation

The discounts obtained through donations apply directly to the amount of IFI due. However, if the ceiling of €50,000 is reached, it is possible to combine this reduction with other devices, such as tax-exempt investments.

Examples of optimized donations

Here are some concrete examples to maximize your discounts:

1. Donate €20,000 to a recognized foundation, allowing a reduction of €15,000 on your IFI.
2. Support a European public utility organization with a donation of €5,000, thus reducing your IFI by €3,750.
3. Divide your donations between several associations to diversify the causes supported.

Tips for maximizing tax benefits

• Verify that the beneficiary organization is eligible for the IFI reduction.
• Keep the receipts of your donations to present them in the event of a tax audit.
• Plan your donations at the beginning of the year to optimize your tax management.

IFI and successions

Treatment of inherited assets

During an inheritance, the real estate transferred falls within the tax base of the IFI. The value selected is the one on the day of transmission, after deduction of any associated debts. Valuing these assets correctly is essential to avoid errors in tax calculations.

Impact on IFI calculation

Inherited assets increase the net taxable value of assets. For example, if an heir receives a property worth €500,000, this sum is added directly to his taxable assets. However, allowances may apply in certain specific cases.

Strategies to reduce taxes

To limit the fiscal impact of successions on the IFI, several strategies can be considered:

1. Donation in dismemberment: transfer the bare ownership while maintaining the usufruct.
2. Make regular donations to gradually reduce taxable assets.
3. Investing in exempt assets, such as professional property or certain real estate funds.

Role of donations in successions

Donations make it possible to anticipate transfers and to reduce the tax base. For example, a donation with reserve of usufruct decreases the taxable value of the property while allowing the donor to continue to benefit from it.

Specific exemptions for inheritances

Some assets transmitted by inheritance may be partially or completely exempt from IFI. This includes in particular:

• Property used for a professional activity.
• Company shares under certain conditions.
• Temporary housing rights for a surviving spouse.

Tips for anticipating transmissions

• Plan early: early transmission is often more tax-efficient.
• Consult a tax advisor to optimize your strategy.
• Evaluate your assets regularly to avoid surprises when declaring the IFI.

Proactive estate management is key to minimizing the impact of IFI and maintaining family assets.

Remedies in the event of a dispute with the tax authorities

Procedures to challenge the IFI

If you believe that the tax authorities have made a mistake in calculating your IFI, you can initiate a dispute procedure. Here are the main steps:

1. Make a written complaint: Send a letter detailing the areas of disagreement to your public finance center.
2. Attach the necessary supporting documents : Include all documents that prove your position (real estate valuations, debts, etc.).
3. Respect the deadlines: You have until December 31 of the second year following the debt collection to contest.

Deadlines for filing an appeal

Meeting the deadlines is essential to avoid the rejection of your request. In general:

• For a complaint, the deadline is Two years after the notification of the tax notice.
• In the event of litigation before an administrative court, additional time may be granted after the response (or lack of response) from the administration.

Documents required for an appeal

A well-prepared claim includes:

• A copy of the contested tax notice.
• Proof of declared values (for example, a real estate valuation).
• Any previous correspondence with the tax authorities.

Role of tax lawyers

A tax lawyer can be a valuable asset for:

• Analyze your file and identify possible flaws in the tax assessment.
• Prepare and write your appeal with a solid case.
• Represent you before the competent courts if necessary.

Examples of common disputes

Here are some common cases of disagreements:

• One overvaluation of real estate compared to their real value.
• The refusal to deduct certain debts related to real estate loans.
• An error in the application of exemptions (for example, for professional goods).

Tips to avoid litigation

Anticipating and verifying your declarations remains the best strategy. An accurate valuation of your assets and a rigorous monitoring of the tax rules in force can avoid a lot of disputes.

A few recommendations:

• Call on a chartered accountant or tax advisor to validate your declarations.
• Keep all the supporting documents related to your real estate and debts.
• If in doubt, contact the tax department directly for clarifications.

Tools to simulate and optimize IFI

Online simulators

Online simulators are practical tools for quickly estimating the amount of your IFI. They allow you to integrate data such as the value of your real estate, your deductible debts, and possible exemptions. However, be careful, these simulations remain theoretical and must be validated by a tax specialist or an expert.

Wealth management software

For a more in-depth analysis, wealth management software offers advanced functionalities. They often include modules to optimize taxation, simulate different scenarios, or even plan long-term strategies. These tools are particularly useful for taxpayers with complex assets.

Role of tax advisers

A tax advisor can not only use these tools for you, but also guide you in interpreting them. Their expertise is crucial to avoid reporting errors or to identify optimization opportunities that are often overlooked.

Examples of successful simulations

Let's take an example: a taxpayer with a main residence valued at 1.5 million euros and secondary assets worth 2 million. After applying the 30% deduction on the main residence and deduction of debts, the tool shows a taxable base of 3 million euros. This makes it possible to estimate an IFI of around 6,000 euros.

Tools for evaluating exemptions

Some simulators include specific modules to identify exempt assets, such as forests or shares in companies for professional use. This can be a great starting point for reorganizing your wealth.

Tips for choosing the right tool

• Define your needs: is a simple simulator enough or do you need a complete software?
• Compare features : some tools offer detailed reports, others are limited to basic estimates.
• Check the reliability of the data used: a regularly updated tool is essential to take account of tax developments.

By using the right tools, you can not only simplify your efforts, but also identify areas for optimization that might otherwise go unnoticed.

The history of the IFI since its creation

Context of the 2018 tax reform

In 2018, the Solidarity Tax on Wealth (ISF) was replaced by the Real Estate Wealth Tax (IFI). This reform, introduced under the presidency of Emmanuel Macron, aimed to refocus taxation on real estate only, leaving financial assets aside. The main objective was to stimulate investment in the real economy, especially in businesses.

Initial goals of the IFI

The IFI was designed to meet several challenges:

1. Reduce the tax exodus of large fortunes.
2. Encourage productive investments, such as stocks and businesses
3. Simplify taxation by limiting the tax base to real estate.

Major legislative developments

Since its creation, the IFI has undergone some adjustments, although its general framework remains unchanged. Notable developments include:

• Clarifications on exempt goods, in particular for professional goods.
• A better definition of deductible debts related to real estate.
• Minor adjustments in reporting procedures.

Impact on taxpayers since 2018

For the households concerned, the IFI represented a significant change. While some have seen their tax burden decrease thanks to the exclusion of financial assets, others have had to rethink their wealth strategy to limit their exposure. Owners of significant real estate assets have often opted for solutions such as property dismemberment or investments in exempt funds.

In 2025, IFI remains a central subject for wealthy taxpayers, requiring careful planning to optimize its effects.

Comparison with the old ISF

Unlike the ISF, which taxed all net assets, the IFI focuses only on real estate. This refocusing has made it possible to alleviate the tax burden on securities, while increasing the pressure on real estate owners. This fundamental distinction has changed taxpayers' investment behaviors.

Prospects for the future

With ongoing fiscal reforms, the IFI could still evolve. The debates focus in particular on a possible expansion of the tax base or on adjustments to tax thresholds. These discussions reflect the tensions between the desire for tax fairness and the need to attract foreign investors.

Criticism and debates around the IFI

Arguments in favor of the IFI

The Real Estate Wealth Tax (IFI) was presented as a measure to modernise the French tax system. Among the arguments put forward:

• Tax simplification: By focusing only on real estate, the IFI simplified the tax base compared to the ISF.
• Incentive to invest : The exclusion of financial assets was intended to encourage investments in French companies.
• Reduction of fiscal exile: Some believe that the IFI is curbing the flight of wealthy taxpayers abroad.

In theory, the IFI needed to balance fiscal fairness and economic dynamism, but its effectiveness is still debated.

Criticism from wealthy taxpayers

On the other hand, many taxpayers denounce the IFI:

1. Perceived injustice: Those with real estate assets but little cash flow feel penalized.
2. Impact on families: Assets passed on over several generations are often heavily taxed.
3. Limitation of wealth strategies: Unlike the ISF, certain optimizations are no longer possible.

Impact on the French economy

The effects of the IFI on the economy are also controversial:

• Loss of tax revenue: According to estimates, the reform would have cost 4.5 billion euros between 2018 and 2022 (modification of the IFI).
• Fewer real estate investments: Targeted taxation could discourage certain real estate projects.
• Limited redistribution: Little visible impact on the reduction of inequalities.

Political and social debates

The IFI has become a recurring topic of debate:

• Left-wing parties often call for a return to the ISF for wider taxation of large fortunes.
• On the right, we are calling for a total abolition of the IFI in order to promote economic attractiveness.
• Unions and associations criticise its limited effect on social justice.

Comparison with foreign tax systems

In Europe, France remains an exception with the IFI. Most countries have abandoned this type of tax, considering it ineffective and complex. On the other hand, some countries prefer taxes on inheritance or capital income.

Reform proposals

Finally, several reform options are mentioned:

• Reintegrate certain financial assets into the tax base.
• Review the thresholds and scales for better progressiveness.
• Create tax incentives to encourage ecological renovations of real estate.

In the context of discussions on the IFI, many opinions differ. Some believe that this tax is necessary for a better distribution of wealth, while others consider it too burdensome for taxpayers. It is essential to be informed and to understand the challenges of this tax. For more information and discover practical advice, visit our site!

Conclusion

In summary, the IFI remains a complex but essential subject for the taxpayers concerned. Whether you own a primary residence, rental property, or other real estate assets, it is essential to fully understand the rules in force for 2025. Take the time to assess your assets, explore the tax exemption options available and, if necessary, call on an expert to optimize your situation. The objective is simple: to meet your tax obligations while minimizing their impact on your finances. So, get ready now to start this year with confidence.

Frequently asked questions

What is IFI and who does it apply to?

The IFI, or Real Estate Wealth Tax, is a tax that concerns people with net real estate assets greater than 1.3 million euros. It has replaced the ISF since 2018.

What types of assets are included in the IFI?

The IFI includes real estate such as main and secondary residences, land, garages, as well as shares in SCPI and SCI, under certain conditions.

Are financial assets subject to IFI?

No, financial assets such as shares, bonds and savings are not taken into account in the IFI base. Only real estate is concerned.

What is the tax threshold for IFI in 2025?

The tax threshold remains fixed at 1.3 million euros in net taxable real estate assets.

How is taxable net worth calculated?

Associated debts, such as mortgages, improvements or even certain property taxes, are deducted from the gross value of the property.

What are the IFI tax rates?

The rates are progressive, ranging from 0.5% to 1.5%, depending on the taxable net worth of the assets.

Are there exemptions for certain goods?

Yes, certain properties such as professional properties or main residences benefit from total or partial exemptions, under certain conditions.

How to declare your IFI?

The IFI declaration is done at the same time as the tax return, online or on paper, with supporting documents to be provided.

What are the sanctions in case of non-declaration?

In case of non-declaration or false declaration, financial penalties and surcharges may be applied by the tax authorities.

Can you reduce your IFI through donations?

Yes, donations to organizations of general interest allow you to benefit from tax reductions of up to 75% of the amount donated, within certain limits.

How does the IFI impact assets held abroad?

French tax residents must include their real estate located abroad in their IFI declaration, unless exempted by tax treaties.

What tools can help simulate IFI?

Online simulators and wealth management software allow you to assess your IFI and optimize your tax strategy.

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