You are inheriting a flat or a house and you dread the tax bill? The real question is not so much the value of the property as the share that comes to you and the family relationship between you and the deceased. A child inheriting €250,000 from a parent does not pay anything like the same tax as a nephew receiving the same sum: the former benefits from a €100,000 allowance and a scale starting at 5%, the latter from an allowance of just €7,967 and a flat rate of 55%.
Understanding how inheritance tax (droits de succession — French inheritance tax) is calculated on a real estate asset means anticipating the cash you will need to keep the family home — or deciding, with full knowledge of the facts, to sell it. Between the valuation of the property, the applicable allowance and the progressive scale, every step weighs on the final amount.
€100,000 allowance per child and per parent — this is the threshold below which, in the direct line, no inheritance tax is due on the share transmitted (CGI — French General Tax Code — art. 779).
What this article covers
This article sets out how inheritance tax is calculated on a real estate asset in 2026: the valuation of the estate, the allowances by family relationship (child, spouse, sibling, nephew, disabled person), the progressive scale in the direct line, the special treatment of life insurance, and a full worked example. Every rule is tied to its reference in the French General Tax Code (CGI — Code Général des Impôts).
The legal framework for inheritance tax on a real estate asset
Inheritance tax (or transfer duties for no consideration on death) is governed by the French General Tax Code. On a death, all of the deceased's assets — including real estate — form the estate. Each heir is taxed on the net share that comes to them, after deduction of the liabilities (debts, flat-rate funeral costs) and application of the personal allowance corresponding to their family relationship.
The real estate asset is valued at its market value on the date of death, that is, the price at which it could be sold under normal market conditions. For the deceased's main residence, a 20% allowance is applied to the market value where the property was, on the date of death, also occupied as a main residence by the surviving spouse, the PACS partner or a child of the deceased (CGI art. 764 bis).
The amount of the allowances depends exclusively on the family relationship between the deceased and the heir. The table below summarises the main allowances applicable in 2026.
| Family relationship | Personal allowance | Legal basis |
|---|---|---|
| Child (direct line, per parent) | €100,000 | CGI art. 779 |
| Surviving spouse / PACS partner | Full exemption from tax | TEPA Act, 21 August 2007 |
| Brother or sister | €15,932 | CGI art. 779 |
| Nephew or niece | €7,967 | CGI art. 779 |
| Disabled person (combinable) | €159,325 | CGI art. 779 |
The exemption of the surviving spouse and the PACS partner stems from the Act in favour of work, employment and purchasing power of 21 August 2007 (known as the TEPA Act). It is total: the spouse or the PACS partner pays no inheritance tax at all, whatever the value of the estate transmitted. The "disabled person" allowance of €159,325 does, for its part, combine with the allowance tied to the family relationship (for example that of a child), which makes it a particularly protective measure.
How to calculate inheritance tax in 2026
The calculation of inheritance tax unfolds in three steps: determine each heir's net taxable share, subtract the applicable allowance, then apply the progressive scale to the balance. Only the last step really differs according to the family relationship. The logic is always the same, whether it concerns a flat, a house or a mixed portfolio: you reason on the net share that comes to each heir, never on the overall value of the estate. This is why the number of heirs has a direct effect on the final bill: the more the transfer is shared between close heirs, the higher the total of the allowances applied and the lower the overall bill.
Step 1 — From the estate to the taxable share
You start from the net estate (the value of the assets, including real estate valued at its market value, minus the liabilities). This estate is then divided between the heirs according to the rules of statutory devolution or the provisions of a will. Each heir thus obtains a gross share, from which their personal allowance is deducted to obtain the net taxable share.
Profile: two children inheriting in equal shares the estate of a widowed parent, made up mainly of a real estate asset. Each receives half of the estate and benefits from their own €100,000 allowance.
Step 2 — The personal allowance
The personal allowance is set against the gross share before any tax calculation. In the direct line, it amounts to €100,000 per child and per parent (CGI art. 779). In other words, a child whose two parents are alive can receive, in total across the two estates, €200,000 free of tax. This allowance resets every fifteen years, which opens the way to early gifts to reduce the taxable base on death.
Step 3 — The progressive direct-line scale
On the net taxable share (after the allowance), you apply the progressive scale by bands of article 777 of the CGI. In the direct line (parents-children), the rates run from 5% to 45%.
| Net taxable share (direct line) | Applicable rate |
|---|---|
| Up to €8,072 | 5% |
| From €8,072 to €12,109 | 10% |
| From €12,109 to €15,932 | 15% |
| From €15,932 to €552,324 | 20% |
| From €552,324 to €902,838 | 30% |
| From €902,838 to €1,805,677 | 40% |
| Above €1,805,677 | 45% |
Because the scale is progressive, each band is taxed only at its own rate: you do not push the whole share into the higher band. The 20% band, which is very wide (from €15,932 to €552,324), covers the vast majority of direct-line real estate estates.
The special case of life insurance
Life insurance escapes the estate in principle: the capital paid to the designated beneficiaries is not subject to ordinary inheritance tax. For premiums paid before the insured's 70th birthday, each beneficiary enjoys an allowance of €152,500 (CGI art. 990 I); beyond that, a specific levy applies. This favourable treatment makes life insurance a complementary tool for transmitting a real estate estate, in particular to provide the heirs with the cash needed to pay the tax due on the property.
Worked example: calculating inheritance tax on a house passed to two children
Let's take a representative situation. For illustration only, the amounts used reflect a market order of magnitude and do not constitute a personalised estimate.
Scenario — Estate of a widowed parent in favour of two children
A widowed parent dies leaving as the only significant asset a house valued at its market value of €482,000 (an order of magnitude consistent with the prices observed in the outer suburbs and mid-sized towns according to DVF and Notaires de France data). They no longer occupied the house as a main residence: the 20% allowance of article 764 bis of the CGI does not apply. The deductible liabilities (sundry costs) are disregarded for the clarity of the example. The two children inherit in equal shares.
| Item | Calculation detail | Amount |
|---|---|---|
| Market value of the house | Estate | €482,000 |
| Gross share per child | €482,000 ÷ 2 | €241,000 |
| Allowance per child | CGI art. 779 | − €100,000 |
| Net taxable share per child | €241,000 − €100,000 | €141,000 |
| Tax — 5% band | €8,072 × 5% | €403.60 |
| Tax — 10% band | (€12,109 − €8,072) × 10% | €403.70 |
| Tax — 15% band | (€15,932 − €12,109) × 15% | €573.45 |
| Tax — 20% band | (€141,000 − €15,932) × 20% | €25,013.60 |
| Tax due per child | Total of the bands | ≈ €26,394 |
Each child must therefore pay about €26,394 in inheritance tax, that is nearly €52,800 for the two siblings on a property worth €482,000. The calculation illustrates the weight of the 20% band: as long as the net taxable share stays below €552,324, it is this rate that drives most of the bill. Note too the value of sharing: if a single child inherited the whole, their net taxable share would reach €382,000 and the tax would exceed €73,000 — far more than the €52,800 combined for the two children, for want of a second €100,000 allowance.
There remains the question of cash. The tax is due within six months of the death, even though the real estate asset is not liquid. Several levers exist: selling the property, mobilising a life insurance policy (outside the estate, allowance of €152,500 per beneficiary before age 70, CGI art. 990 I) or asking the tax authorities for instalment or deferred payment of the tax. To estimate your own situation precisely, the Mon Simulateur Immobilier inheritance tax calculator automatically applies the allowance and the scale according to your family relationship.
Common mistakes in calculating inheritance tax
Mistake no. 1 — Confusing purchase price with market value on death
The real estate asset is valued at its market value on the date of death, not at its historical acquisition price. Under-valuing the property exposes you to a reassessment by the tax authorities, with late-payment interest. A prudent valuation relies on recent comparables (DVF data, the opinion of a notary or an estate agent).
Mistake no. 2 — Forgetting the 20% allowance on the main residence
Where the deceased occupied the property as a main residence and the surviving spouse, the PACS partner or a child also occupied it on that date, a 20% allowance applies to the market value (CGI art. 764 bis). Many heirs are unaware of it and declare the full value, needlessly inflating the taxable base.
Mistake no. 3 — Believing the spouse pays tax
Since the TEPA Act of 21 August 2007, the surviving spouse and the PACS partner are fully exempt from inheritance tax. This exemption is often confused with the more limited one, applicable between siblings under conditions. The unmarried partner (cohabitation), for their part, is treated as a third party and taxed at 60%.
⚠️ Warning: the deadline for filing the inheritance tax return is six months from the death where it occurs in mainland France. A late filing leads to late-payment interest and, where applicable, a surcharge. For a real estate asset that is hard to liquidate, instalment or deferred payment of the tax can be requested.
Mistake no. 4 — Overlooking earlier gifts
Gifts made by the deceased in the fifteen years preceding the death are recalled to the estate and reduce the available allowance. Anticipating the transfer through gifts staggered every fifteen years remains the most effective lever for limiting the tax, provided this recall period is respected.
Estimate your inheritance tax before you decide
Mon Simulateur Immobilier inheritance tax calculator
Enter the value of the real estate asset, the number of heirs and your family relationship with the deceased: the calculator applies the personal allowance (€100,000 in the direct line, CGI art. 779) and the progressive scale of 5% to 45% (CGI art. 777) to estimate the tax due per heir and the total amount of the estate.
To go further: the equalisation payment (soulte) calculator for partition between heirs and the bare-ownership and usufruct split (démembrement) simulator.
Conclusion
The calculation of inheritance tax on a real estate asset rests on three variables: the market value of the property, the family relationship and the progressive scale. In the direct line, the €100,000 allowance per child (CGI art. 779) and the wide 20% band shape most of the bill, while the surviving spouse and the PACS partner remain exempt (TEPA Act 2007). Anticipating through gifts and life insurance makes it possible to reduce the taxable base and to prepare the cash.
Before any trade-off between keeping and selling the property transmitted, work out the operation precisely. The Mon Simulateur Immobilier inheritance tax calculator applies the allowance and the scale to your situation and gives you the net amount to set aside per heir.
