In 2025, 193,600 households paid the French real estate wealth tax (IFI — impôt sur la fortune immobilière), up from 186,100 in 2024, a 4% increase in one year, generating €2.3 billion in revenue, up 8.0% (DGFiP Statistics, "The real estate wealth tax in 2025"). That growth owes nothing to a reform: the €1,300,000 threshold has not moved since 2018 — it is not indexed to inflation — while prices hold at high levels: existing flats in Paris traded at €9,520/m² at the end of May 2026 (Notaires du Grand Paris).
If your net property wealth exceeds — or approaches — €1.3 million on 1 January 2026, calculating the IFI precisely is not a theoretical exercise: between the 30% allowance on the main residence, the debts that are genuinely deductible and the tapering relief (décote) between €1.3M and €1.4M, each parameter is worth several hundred, sometimes several thousand euros. And a main residence overvalued by 10% can, on its own, push you over the threshold.
193,600 households liable for the IFI in 2025, up 4% in one year — a €1,300,000 threshold frozen since the tax was created in 2018, against property values holding at high levels (DGFiP Statistics).
What this article covers
This article details the full IFI 2026 calculation: the €1.3M liability threshold and its interaction with a scale that taxes from €800,000, the tax base of article 965 of the French General Tax Code (CGI — Code général des impôts), the 30% main residence allowance and its limits, deductible debts and their traps (interest-only loans, family loans, self-loans), the tapering relief, the 75% income cap, a fully worked example based on real market prices, and the 2026 filing calendar.
French wealth tax 2026: who is liable above the €1.3M threshold
The IFI is due by households whose net taxable property wealth, assessed on 1 January, is strictly greater than €1,300,000 (article 964 of the CGI, unchanged since the tax was created by Act No. 2017-1837 of 30 December 2017). The threshold is assessed at household level, across all the property assets defined by article 965 of the CGI, after deducting admissible debts. And — this is the most misunderstood nuance — once the threshold is crossed, the tax is not computed "from €1.3M upwards": the scale applies from €800,000 (article 977 of the CGI).
Neither the threshold nor the brackets have been revalued since the tax came into force on 1 January 2018. This non-indexation is the silent engine behind the growing number of taxpayers: with a frozen scale, the mere revaluation of property estates is enough to push a household over the threshold (DGFiP Statistics).
What the 2026 Finance Act changes — and does not change
⚠️ Warning: no, the IFI has not been replaced by a "tax on unproductive wealth". Voted by the National Assembly on 31 October 2025, that broader tax was dropped from the final text of the 2026 Finance Act (Act No. 2026-103 of 19 February 2026). The IFI therefore applies in full in 2026 — threshold, scale and relief unchanged — contrary to what many pieces published in autumn 2025 still claim.
The only change is indirect: the 2026 Finance Act creates a tax on assets not used for an operating business held in family asset-holding companies (new article 235 ter C of the CGI), together with a new article 975, VII of the CGI exempting from IFI the shares already subject to that tax — an anti-double-taxation mechanism applying to financial years ending on or after 31 December 2026. Nothing changes, therefore, for your 2026 IFI calculation.
Filing in 2026: the 2042-IFI annex and its deadlines
The IFI is declared through the 2042-IFI annex, filed with the income tax return. The 2026 filing deadlines have now passed: online, Thursday 21 May (departments 01 to 19 and non-residents), Thursday 28 May (departments 20 to 54) and Thursday 4 June (departments 55 to 974 and 976); on paper, Tuesday 19 May 2026 for all departments (official calendar published on impots.gouv.fr).
A mistake spotted after the deadline is not set in stone. If you filed online, the correction service on impots.gouv.fr lets you amend your 2042-IFI until mid-December: that is the normal route for adding a forgotten debt or correcting an overstated market value. Beyond that, a formal claim (réclamation contentieuse) remains open until 31 December of the second year following the year of payment (article R.* 196-1 of the French Book of Tax Procedures). And for the 2027 campaign, what matters is settled on 1 January: it is the composition and the value of your estate on that date, fixed well before any filing, that determine the tax.
The IFI tax base: which assets enter the calculation
Article 965 of the CGI defines the base: all the property assets and property rights belonging to the household on 1 January, plus the fraction of the value of company shares that represents taxable property assets.
Directly held property, split ownership, SCIs and SCPIs
First into the base come directly held buildings: main residence, second homes, rental properties, land. Property rights — usufruct, bare ownership — are also covered by article 965; the split of value between usufruct holder and bare owner follows its own mechanics, detailed in our guide to the usufruct/bare-ownership scale of article 669 of the CGI.
Then come company shares. Shares in an SCI (société civile immobilière — French property holding company), in SCPIs and OPCIs (French "paper property" investment vehicles) are taxable up to the fraction of their value representing the property assets held directly or indirectly by the company (article 965, 2° of the CGI). The company's tax regime makes no difference here: whether the company is taxed under corporate tax or personal income tax, the property fraction of the shares remains taxable — our SCI corporate tax vs income tax comparison details what that choice changes. Holdings of less than 10% in operating companies escape the base, however, as does property assigned to the company's own operating business.
Business assets: the article 975 exemption
Properties used for the taxpayer's main professional activity — industrial, commercial, craft, agricultural or liberal — are exempt. For companies subject to corporate tax, the exemption notably requires an effective, normally remunerated management position and at least 25% of the voting rights (article 975, I and III of the CGI).
The 30% main residence allowance — and its three limits
Article 973, I of the CGI provides a 30% allowance on the actual market value of the building occupied as a main residence by its owner. Three strict limits. One: for jointly taxed couples, only one building benefits — never twice per couple. Two: it applies neither to second homes nor to rental properties. Three: direct ownership only — the statute expressly excludes shares in property management or investment companies, even where the building is the shareholder's main residence (article 973, I of the CGI).
Market value: the allowance applies to the actual market value on 1 January — the value you must estimate and be able to justify. A 10% overvaluation flows through to the taxable base at 70%: it is one of the most sensitive parameters of the calculation, as the example below shows.
Deductible debts: the article 974 list and its traps
Article 974, I of the CGI sets out a restrictive list of deductible debts, provided they exist on 1 January and relate to taxable assets: expenses for acquiring property or property rights; repair and maintenance expenses; improvement, construction, reconstruction or extension expenses; taxes due by reason of ownership of the properties — including the property tax (taxe foncière) — and expenses for acquiring company shares, pro rata to their property fraction.
| Liability | Deductible from the IFI base? | Reference |
|---|---|---|
| Outstanding capital of an amortising loan (purchase, works) | Yes | art. 974, I of the CGI |
| Property tax (taxe foncière) due | Yes — tax due by reason of ownership | art. 974, I of the CGI |
| Income tax and social charges on rents | No | art. 974, I, 5° of the CGI |
| Interest-only loan (prêt in fine) | Partially — shrinking deduction | art. 974, III of the CGI |
| Loan with no fixed term | Capital reduced by one-twentieth per year elapsed | art. 974, III of the CGI |
| Family loan (ascendant, descendant, brother, sister) | No, unless its arm's-length character is proven | art. 974, II of the CGI |
| Loan from the tax household or a controlled company ("self-loan") | No, never | art. 974, II of the CGI |
Interest-only loans: a deduction that melts every year
For an interest-only loan (prêt in fine) — whose capital is repaid in one instalment at maturity — article 974, III of the CGI only allows a shrinking deduction, as if the loan amortised on a straight-line basis over its term: capital − (capital × years elapsed / total term). A €300,000 interest-only loan over 15 years, taken out 6 years ago, is thus deductible only up to €300,000 − (€300,000 × 6/15) = €180,000. Loans with no fixed term follow a separate regime: the capital is reduced by one-twentieth per year elapsed. Two distinct rules within the same article 974, III, never to be merged.
Family loans, self-loans and the anti-abuse ceiling
Loans taken out — directly or through an intermediary company — from the taxpayer, a member of their tax household or a company they control are never deductible (article 974, II of the CGI). Loans from the wider family group outside the household — ascendants, descendants, brothers and sisters — are not deductible either, unless the arm's-length character of the loan is proven: repayment schedule honoured, repayments actually made (article 974, II of the CGI). An anti-abuse ceiling completes the mechanism: where taxable wealth exceeds €5M and debts exceed 60% of that value, the excess fraction is only deductible up to 50% (article 974, IV of the CGI).
IFI 2026 scale, tapering relief and the 75% cap: computing the tax
The bracket scale of article 977 of the CGI
The 2026 scale, unchanged since 2018 and not indexed to inflation, applies to the net taxable value once the €1.3M threshold is crossed:
| Fraction of net taxable value | Rate |
|---|---|
| Up to €800,000 | 0% |
| From €800,000 to €1,300,000 | 0.50% |
| From €1,300,000 to €2,570,000 | 0.70% |
| From €2,570,000 to €5,000,000 | 1% |
| From €5,000,000 to €10,000,000 | 1.25% |
| Above €10,000,000 | 1.50% |
Direct consequence: the €500,000 between €800,000 and €1.3M costs €2,500 (at 0.50%) for every taxpayer, before the 0.70% fraction even comes into play.
The relief between €1.3M and €1.4M: €17,500 − 1.25% × P
To smooth entry into the tax, article 977, 2 of the CGI provides a tapering relief where the net taxable wealth P is equal to or greater than €1,300,000 and lower than €1,400,000: the computed tax is reduced by €17,500 − 1.25% × P. For P = €1,350,000, the relief is €17,500 − €16,875 = €625. It phases out exactly at €1,400,000 (€17,500 − 1.25% × €1,400,000 = 0). A drafting subtlety of the statute: the relief is defined from €1.3M inclusive, whereas liability requires wealth strictly above €1.3M (article 964 of the CGI).
The 75% income cap and the donations reduction
Two mechanisms can then reduce the computed IFI. The cap (article 979 of the CGI): the sum of the IFI and the taxes due on the previous year's income — income tax, social charges and the exceptional contribution on high incomes (CEHR) included — cannot exceed 75% of that year's net worldwide income; any excess is deducted from the IFI. The donations reduction (article 978 of the CGI): 75% of donations made to eligible organisations — State-recognised public-interest foundations, research and higher-education institutions, work-integration enterprises — capped at €50,000 of reduction per year, i.e. roughly €66,667 of donations. The 2025 Finance Act (Act No. 2025-127 of 14 February 2025) widened the list of eligible organisations without touching the rate or the cap.
Worked example: a Paris couple at €1,307,760 net taxable
Profile: a married couple, a 140 m² main residence in Paris valued at €1,332,800 (140 m² × €9,520/m², the average price of existing flats in Paris at the end of May 2026 according to the Notaires du Grand Paris), and a 90 m² unfurnished rental flat in the wider Île-de-France region valued at €550,800 (90 m² × €6,120/m², the regional average at the same date). The rental flat was financed with an amortising loan — average mortgage rates stood at 3.26% in June 2026 (Observatoire Crédit Logement/CSA) — whose outstanding capital reaches €172,000 on 1 January 2026. Property taxes due: €4,000. For simplicity, the example uses the latest published average prices.
First step: rebuild the net taxable base.
| Item | Calculation detail | Amount |
|---|---|---|
| Main residence (market value) | 140 m² × €9,520/m² | €1,332,800 |
| Main residence allowance | − 30% (article 973 of the CGI) | − €399,840 |
| Rental flat (Île-de-France) | 90 m² × €6,120/m² | €550,800 |
| Deductible debts | Outstanding capital €172,000 + property taxes €4,000 | − €176,000 |
| Net taxable wealth (P) | €932,960 + €550,800 − €176,000 | €1,307,760 |
The €1,300,000 threshold is crossed: the household is liable. Second step: apply the scale, then the relief — P falling between €1.3M and €1.4M.
| Step | Calculation detail | Amount |
|---|---|---|
| Bracket from €800,000 to €1,300,000 | €500,000 × 0.50% | €2,500 |
| Bracket from €1,300,000 to €1,307,760 | €7,760 × 0.70% | €54 |
| IFI before relief | €2,500 + €54 | €2,554 |
| Tapering relief (article 977, 2 of the CGI) | €17,500 − 1.25% × €1,307,760 | − €1,153 |
| IFI due for 2026 | — | €1,401 |
That is about 0.1% of net taxable wealth — the relief absorbs nearly half of the tax here. Without the 30% allowance — the same main residence held in an SCI, all else equal — the base would climb to €1,707,600 and the tax to €5,353 (€2,500 + 0.70% × €407,600), with the relief lost: direct ownership of the main residence is "worth" €3,952 a year here.
Valuation is the other decisive parameter. An estimate of the main residence 10% higher (€1,466,080) inflates the base by €93,296 after the allowance: P reaches €1,401,056, the relief disappears and the IFI climbs to about €3,207 (€2,500 + 0.70% × €101,056) — more than double. Conversely, for a household slightly below the threshold, those same 10% decide whether the IFI is due at all. Hence the importance of a rigorous estimate on 1 January, factoring in what genuinely moves market value — starting with the energy rating, whose effect our analysis of green value and the impact of the EPC on sale prices quantifies.
The four mistakes that distort the IFI calculation
Mistake No. 1 — Believing the IFI disappeared in 2026
The "tax on unproductive wealth" voted by the National Assembly in autumn 2025 never came into being: it was dropped from the final text of the 2026 Finance Act. If you rely on an article published in late 2025 announcing the replacement of the IFI, you quite simply risk not filing. The IFI applies in full in 2026, threshold and scale unchanged.
Mistake No. 2 — Computing the tax "from €1.3M upwards"
The €1.3M threshold triggers the tax, but the scale starts at €800,000: the fraction between €800,000 and €1.3M costs €2,500 on its own. A net taxable estate of €1,310,000 therefore does not generate €70 of tax (0.70% × €10,000), but €2,570 before relief.
Mistake No. 3 — Stretching the 30% allowance beyond its scope
The article 973 allowance only concerns the main residence occupied by its owner: neither second homes, nor rental properties, nor a main residence held through an SCI — and never twice for a jointly taxed couple. Applying 30% wrongly to another property means under-declaring the base.
⚠️ Warning: the tapering relief only applies between €1,300,000 (inclusive) and €1,400,000 (exclusive). At €1,400,000, it is worth exactly zero (€17,500 − 1.25% × €1,400,000 = €0). Never apply it beyond that bound — and never forget it within the window, where it is worth up to several hundred euros.
Mistake No. 4 — Deducting an interest-only loan at 100%, or the tax on rents
Two liability mistakes come up constantly: deducting the full capital of an interest-only loan, when article 974, III of the CGI imposes a shrinking deduction by theoretical instalments — a rule many generic simulators ignore — and deducting the income tax and social charges due on rents. Only taxes due by reason of ownership — the property tax (taxe foncière) in particular — are deductible (article 974, I, 5° of the CGI).
Check your 2026 IFI and plan for 2027
Mon Simulateur Immobilier IFI simulator
Enter your properties, your debts and your main residence: the simulator applies the 30% allowance, deducts the admissible liabilities, runs the bracket scale of article 977 of the CGI and automatically computes the tapering relief between €1.3M and €1.4M — for an exact IFI amount as of 1 January 2026.
To go further: the bare-ownership/usufruct simulator to value split ownership, and the property valuation tool to ground the market value of your assets on 1 January.
Conclusion
The IFI 2026 calculation runs in four steps: rebuild the article 965 base, apply the 30% allowance on the directly held main residence, deduct the liabilities admitted by article 974 — respecting the shrinking deduction of interest-only loans — then run the scale and, between €1.3M and €1.4M, the tapering relief. With a threshold and brackets frozen since 2018 against prices holding at high levels, households that never thought themselves concerned cross the threshold every year: the valuation on 1 January deserves as much attention as the calculation itself.
To go from the rule to your own situation, the Mon Simulateur Immobilier IFI simulator computes your exact tax — base, allowance, relief and scale included. And because an estate taxable under the IFI is also an estate that will one day be passed on, plan ahead for the calculation of inheritance tax on real estate, which follows separate allowances and scales.
