Wealth tax in France can be technical to understand. Based on the official calculator, we explain you how to regularize your situation regarding the french wealth tax.
If you bought a property in France, its net value can evolve depending on the french real estate marketing.
Wealth tax france calculator : Control and regularization of real estate wealth tax in France: answers to frequently asked questions
In accordance with article 964 of the French General Tax Code (CGI), the Impôt sur la Fortune Immobilière (IFI) is payable by all individuals domiciled in France, if the net value of their assets located in France and abroad exceeds 1.3 million euros.
Non-resident taxpayers are also liable for this tax solely on their assets located in France, if their net value exceeds the 1.3 million euro threshold. The IFI is an annual tax, for which the conditions of liability are assessed on January 1 of each tax year. The amount of IFI due depends on a progressive scale divided into 6 brackets:
|Fraction of taxable net asset value
|Up to 800.000EUR
|Between 800.000EURand 1,3 millionEUR (included)
|Between 1,3 millionEUR and 2,57 millionEUR (included)
|Between 2,57 millionEUR and 5 millionEUR (included)
|Exceeding 5 millionEUR and under or equal to 10 millionEUR
|Exceeding 10 millionEUR
Wealth tax france calculator
We give you the possibility to evaluate your assets taxable to the IFI (tax on real estate wealth)
Why you should do it?
- To determine the net value of your taxable assets in France.
- To plan your next real estate purchases in France with serenity.
- To know how much you will be liable to the French tax authorities.
- To have a first vision with figures before buying your property.
Wealth tax france calculator : Are you liable for this tax ?
You are subject to the IFI if the net taxable value of your real estate assets exceeds €1.3 million on January 1, 2023. Properties are always valued at market value. In the absence of a legal definition, market value corresponds to the price that could be obtained through the interplay of supply and demand, in a real market and taking into account the condition of the property prior to death, donation or sale. It is up to the tax authorities to prove the inadequacy of the price claimed by the taxpayer.
Valuations are usually based on comparisons with similar properties. The 30% allowance for the principal residence is maintained (not applicable if the property is held through an SCI). In addition, the tax cap of 75% of the taxpayer’s income is still applicable (for French residents only). Finally, only debts relating to taxable assets are deductible. Debts relating to partially taxable assets are only partially deductible. While certain taxes are deductible (property tax, theoretical IFI), tax on real estate income is not. In particular, debts relating to :
- The acquisition of taxable property or real estate rights (real estate loans),
- Payment for improvements, construction, reconstruction or extension work,
- The acquisition of shares, in proportion to the value of the taxable real estate,
- Payment for maintenance work actually carried out by the owner or carried out by the owner on behalf of the tenant, but for which the owner has not been able to obtain reimbursement by December 31 of the year in which the tenant leaves.
Buildings owned by companies in which the taxpayer has a stake of less than 10% are exempt from the IFI. The IFI is calculated on the value of your net taxable real estate assets using a scale.
Form 2042-IFI must be completed if your net taxable property assets on January 1 exceed €1,300,000. If you have no income taxable for income tax purposes, you must complete the 2042-IFI-COV return and the 2042-IFI return.
The tax authorities' right of inspection (délai de reprise)
The intervention period allows the tax authorities to check and rectify tax returns during a defined period. The “délai de reprise” refers to a period of time during which the tax authorities can carry out an audit of a tax return.
3-year intervention period
In principle, the tax authorities’ right of audit expires on December 31 of the third year following the year in which the IFI became payable. Thus, a tax return filed for the year 2023 may be audited by the tax authorities up to December 31, 2026.
6-year intervention period
The 6-year time limit applies when the conditions required for the application of the 3-year time limit are not met, i.e. in the absence of a tax return, or when further investigations are required. This limitation period applies in particular in the event of failure to file a declaration, or in the event of omission of an asset from the detailed declaration.
10-year intervention period
By way of exception, the right of recovery may be exercised up to December 31 of the tenth year. This is the case when reporting obligations relating to assets held abroad in bank accounts have not been complied with.
Wealth tax france calculator: Penalties in the event of no declaration, no payment or late subscription of IFI returns
Failure or delay in submitting the IFI tax return
The tax due is subject to late payment interest of 0.20% per month and a 10% surcharge for late filing. The 10% surcharge is increased to 40% if the declaration is not filed within thirty days of receipt of a formal notice, or if the return is filed late following the disclosure of foreign assets that were not subject to the declaration requirements.
In the event of insufficiencies, omissions or inaccuracies in the IFI declaration
In principle, these offences are punishable by interest on arrears of 0.20% per month, when committed in good faith. Where bad faith on the part of the taxpayer is established, in addition to the aforementioned interest on arrears, the tax is increased by 40%. In the case of wilful misconduct, the surcharge is increased to 80% if the taxpayer is guilty of fraudulent manoeuvres or abuse of rights. Strategically, therefore, it is preferable to file a tax return each year to benefit from a reduced limitation period of 3 years, since if no tax return is filed, the tax authorities may carry out an audit for a period of 6 years.
How can we help you ?
The missions we can offer you:
Drafting of a tax study: with simulation of your tax obligations in France ; a key solution to secure your installation in France in order to avoid unfortunate situations, such as delays or errors in your tax returns.
Follow-up of your tax returns in France: income tax, real estate wealth tax, rental income
Initiation of a tax audit
Various situations are likely to bring on a tax audit: disposals, inheritance-related transactions, total absence of declarations, under-estimation of assets or lack of consistency between declarations and your actual assets. The risk is all the greater when it comes to the IFI, where the apparent standard of living is not in line with the tax actually paid. Most tax audits are carried out by cross-checking data.
The tax authorities have a substantial database containing a wealth of information on taxpayers. One application of this database concerns real estate acquisitions/transfers, another deals with donations and inheritances, and the third identifies each taxpayer’s IFI declarations, listing assets and liabilities.
Is spontaneous regularization a good idea?
You’ve never declared your wealth tax and this situation is causing you sleepless nights? Are you planning to sell a property and fear that this transaction could lead to an inspection?
The tax authorities generally welcome the spontaneous regularization of omitted declarations. This procedure involves filing wealth tax returns for the last 6 years. This spontaneous regularization is proof of your good faith, and it is a major advantage when it comes to reducing penalties. Don’t hesitate to contact our firm for further information on this subject!