What is the IFI and how is it calculated?
Since the abolition of the ISF (Solidarity Tax on Wealth) in 2018, the IFI (Real Estate Wealth Tax) has become the main wealth tax affecting the wealthiest taxpayers. Understanding how it works is essential for any owner of significant real estate assets, as it can represent a significant tax burden. This article explains in detail what the IFI is and how it is calculated.
What is the IFI? Definition and scope of application
The IFI is an annual tax that concerns individuals owning net taxable real estate assets worth more than €1,300,000 as of January 1 of the tax year. Unlike the ISF, it only covers real estate assets (and not financial assets such as shares, bonds, or life insurance). The following are concerned:
- Built and unbuilt real estate properties (land, houses, apartments)
- Shares of real estate civil companies (SCI) or unlisted companies holding real estate
- Real estate assets held indirectly through funds or structures
How is the IFI calculated? The progressive scale
IFI is calculated on the net taxable value of your real estate assets, after deduction of related debts (real estate loans, works, etc.). The scale is progressive and applies in brackets:
2024 IFI scale
| Fraction of the net taxable value | Tax rate |
|---|---|
| Up to €800,000 | 0 % |
| From €800,001 to €1,300,000 | 0,50 % |
| From €1,300,001 to €2,570,000 | 0,70 % |
| From €2,570,001 to €5,000,000 | 1,00 % |
| From €5,000,001 to €10,000,000 | 1,25 % |
| Greater than €10,000,000 | 1,50 % |
Example: for a net taxable wealth of €2,000,000, the IFI will be calculated as follows:
- €0 on the first €800,000
- 0.50% on €500,000 (from €800,001 to €1,300,000) = €2,500
- 0.70% on €700,000 (from €1,300,001 to €2,000,000) = €4,900
- Total IFI due: €7,400
Which properties are exempt or benefit from allowances?
Not all real estate properties are taxed in the same way. Here are the main exemptions and deductions:
Total exemptions
- The main residence benefits from a 30% reduction on its market value
- Business assets (commercial or agricultural premises used for the taxpayer's professional activity)
- Woods, forests and agricultural land under certain conditions
- Real estate assets held by a non-resident (subject to tax treaty conditions)
Specific allowances
- 30% reduction on the main residence
- 20% allowance on furnished rental properties (if professional furnished rental)
- Allowance for holding period (for properties held for more than 5 years, subject to conditions)
How to declare and pay the IFI?
The IFI declaration is now made via the online income tax return (form 2042-IFI). You must declare the value of your net taxable real estate assets as of January 1st. Payment is made at the same time as income tax, generally in September.
Caution: penalties may apply for late filing or omission. It is therefore crucial to be precise and exhaustive in your declaration.
How to optimize your IFI? Tax strategies
Several strategies allow you to reduce your IFI while remaining within the legal framework:
- Investing in professional properties (commercial premises, offices)
- Carry out improvement or renovation work (reduction of net value)
- Giving SCI shares to your children (split ownership)
- Investing in SMEs or FCPIs (IFI tax reduction)
Pour une optimisation personnalisée, il est fortement recommandé de consulter un <a href="https://www.cecile-zak
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📅 Mis à jour le 16/08/2026 — Par Maître Cécile Zakine, avocate et Docteur en Droit à Antibes. ☎ 06 21 69 91 77.
