2026 Wealth Tax: who has to pay it?

Wealth tax – impôt sur la fortune immobilière (IFI) – is a tax on net property wealth. It replaced the former ISF tax, which covered a wider variety of wealth, in a move intended by President Macron to focus the tax more on what he considered unproductive wealth as opposed to wealth invested in businesses. 

France is one of only two EU countries to have such a tax, along with Spain. There have been some political moves to slightly widen its scope again, but nothing has changed with regard to 2026 declarations.

Immobilière means relating to real estate. IFI can also relate to the value of property “rights,” such as the usufruit (lifetime right to live in a home). Apart from actual land and buildings, it can also apply to shares related to investment in real estate, or, if of a mixed nature, in proportion to the investment in real estate. 

Shares in companies whose main activity is holding real estate will always be concerned. As for shares in other companies owning property where this is not the main purpose, the situation is more complex, though they will often be exempt if the building is directly used by the firm in its business or you own less than 10% of the shares.

Buildings you use for your own work are not included. Commercially managed woods and forests are also excluded, as are agricultural holdings rented to farmers. Furnished properties rented out ‘professionally’ are also exempt.

IFI applies to people having net property wealth of more than €1.3 million after deductions, including 30% of the value of a main home. Valuations should be at reasonable market prices, and tools you may use include Patrim. 

More information on IFI declarations can be found in our dedicated help guide to this topic. It is available as a complimentary guide to all The Connexion subscribers.

This year’s wealth tax is:

• Based on relevant net wealth of your tax household (yourself, a married, pacsé, or civil partner, children, and other dependants) as of January 1, 2026. Unlike for income tax, your foyer fiscal for IFI includes long-term partners who you live with as well as spouses and civil partners.

• Triggered by net wealth of at least €1.3 million - it is then calculated on net wealth over €800,000. Remember that 30% of the market value of your main home can be deducted when working out your assessable assets for IFI (this can affect whether you fall into the bracket to pay at all, and if you do still have accessible wealth of at least €1.3 million after it, it also reduces the wealth on which tax is charged). This automatic 30% does not apply to homes owned via an SCI, however notaires state that you can generally make around a 10-20% allowance against market value in this case, linked to the difficulty you may encounter in selling your shares (should you wish to).

• Your responsibility. If you think the assets minus property-related liabilities of your household exceeded the threshold on January 1, 2026, you need to take the initiative to make a declaration. Relevant liabilities include mortgage debt, property taxes, and other outstanding debts related to taxable properties. Once you have calculated your IFI, you can also make a final calculation deducting the IFI itself as a property-related liability.

• Generally assessable on worldwide net property-related wealth if you are permanently resident in France. For non-residents, it relates mostly to properties and property rights in France and shares in companies set up to own property in France (or in proportion to the ownership in France if they also own property elsewhere). For expatriates living in France, foreign assets are exempt from IFI until the end of the fifth calendar year starting after the year you became fiscally resident. Wealth tax being based on eligible net wealth on January 1, you would benefit this year if you moved in 2021 or later.

• Deductions you can make from taxable income include work to significantly improve comfort and amenities, as well as extensions and reconstruction, maintenance you had to do as a landlord, or that you paid for on behalf of a tenant and that was not yet reimbursed by the end of last year if the tenant left in the year. Debts incurred for the acquisition of properties or property rights and shares (e.g., a broker’s fees) are also deductible. A reduction of the tax bill is available up to 75% of the value of eligible gifts to charity within a limit of €50,000.

• A calculation called the décote is available to reduce the tax bill of people who declare wealth of €1,300,000 to €1,400,000. IFI is also subject to a ceiling: your income tax on 2025 income plus 2026’s IFI must not be more than 75% of 2025’s income – if it is, then the difference is deducted from your IFI.

• If in doubt, take advice about your liability and calculations; there may be other relevant factors we cannot address here.

The IFI tax bands are as follows:

€0 - €800,000: 0%

€800,000 - €1,300,000: 0.5%

€1,300,000 - €2,570,000: 0.7%

€2,570,000 - €5,000,000: 1%

€5,000,000 - €10,000,000: 1.25%

Above €10,000,000: 1.5%

Valuations may be an issue, especially for the main home. Compare its value to similar ones in the area, taking into account its specific characteristics.

In your impots.gouv.fr account you can find the Patrim service, which can be used as a guide. Click Autres services, then Re­cher­cher des transactions immobilières. Click to to say you are making an IFI declaration. It will give examples of recent sale prices in your area.

Everyone must declare by the same dates as for French income declarations and the tax office asks that this be done online where possible (non-residents cannot do this where declaring for the first time for income tax and/or IFI).

If you have an income declaration to make, the IFI decla­ration can be done at the same time by selecting impôt sur la fortune immobilière when choosing which rubriques you require in stage 3.

If completed on paper, the declaration is on form 2042-IFI. Also, select 0IF on the main 2042 form. If you have no French income declaration to make, use the 2042-IFI as well as the 2042-IFI COV.

You will receive a separate avis d’imposition for IFI in around September; if you made an income declaration it will come with the avis d’imposition for that.

The declaration should be in euros, using the Banque de France rate at the end of December 2025, for example:

€1.15  to 1£

€0.85  to 1$ (US)