IFI 2026: Who is Subject to the Real Estate Wealth Tax?
The Real Estate Wealth Tax (IFI) applies to taxpayers whose net taxable real estate assets exceed €1.3 million as of January 1, 2026. This threshold has been maintained since the 2018 reform that replaced the ISF with the IFI (source: Article 964 of the General Tax Code).
The real estate assets taken into account mainly include:
Directly held real estate properties (houses, apartments, land, etc.)
Shares in real estate civil companies (SCI) and real estate investment companies (SCPI)
Real estate rights held through other legal structures
Conversely, certain assets are excluded from the calculation, notably:
The primary residence benefits from a flat 30% allowance on its market value (source: Article 975 of the General Tax Code).
Professional assets under strict conditions
Life insurance contracts and financial investments not containing direct real estate assets
Thus, a net taxable real estate wealth exceeding €1.3M triggers IFI taxation. In 2024, approximately 150,000 tax households were concerned in France (source: AMF Annual Report 2023).
How to Calculate Your IFI in 2026?
The IFI calculation is based on the precise valuation of net taxable real estate assets as of January 1, 2026. The process breaks down into several steps:
1. Valuation of the Gross Value of Real Estate Assets
The value used is the market value as of January 1, 2026, i.e., the estimated price in case of sale on the open market. For:
Direct real estate: estimation based on rental values, comparable transactions, or notarial expertise.
SCPI and SCI: value of shares as of January 1, 2026, generally communicated by the management company (source: ASPIM Quarterly Bulletin 2024).
2. Deductions and Allowances
From the gross value, deduct:
Debts related to real estate assets: loans contracted for the acquisition or renovation of properties, deductible up to their share attributable to the taxable asset.
30% allowance on the primary residence: this allowance applies only to the market value of the primary residence.
3. Calculation of Net Taxable Wealth
The formula is:
Gross value of real estate assets - deductible debts - primary residence allowance = net taxable wealth
If this net wealth is below €1.3 million, no IFI is payable.
4. Application of the Progressive Scale
The 2026 scale remains identical to that of 2025:
Net Taxable Value (€)
Tax Rate (%)
From 0 to 800,000
0
800,001 to 1,300,000
0.5
1,300,001 to 2,570,000
0.7
2,570,001 to 5,000,000
1
5,000,001 to 10,000,000
1.25
Over 10,000,000
1.5
The IFI amount is the sum of each bracket multiplied by its respective rate.
Assets Included and Excluded in the IFI Estate
Here is a summary table of the main assets included and excluded in the IFI calculation:
Type of Asset
Included in IFI
Comments
Direct real estate (apartments, houses, land)
Yes
Market value net of deductible debts
SCPI shares
Yes
Value of the share as of January 1
SCI shares
Yes
Proportional to the value of the real estate held
Primary residence
Yes, with 30% allowance
Mandatory legal allowance
Professional assets
No, under conditions
Main activity and exercise conditions
Life insurance, securities accounts
No
No direct real estate assets
Legal Strategies to Reduce Your IFI in 2026
Several levers allow legal optimization of IFI by minimizing the taxable base:
1. Use Deductible Debts
Loans contracted to finance the acquisition or improvement of real estate assets are deductible. Optimizing the use of debt thus reduces the taxable base.
2. Invest Through Companies Not Subject to IFI
Commercial companies (such as SARL, SAS) holding real estate are not taken into account unless their main activity is real estate. Therefore, investing through a commercial company can exclude assets from the IFI base (source: Tax Instruction BOI-PAT-IFI-20-20-10-10).
3. Utilize the 30% Primary Residence Allowance
It is essential to correctly declare the primary residence to benefit from the automatic allowance. Strategically changing the primary residence can also be considered.
4. Donations and Usufruct/Bare Ownership Splitting
Usufruct/bare ownership splitting allows reducing the taxable value. For example, donating the bare ownership of a property to children while retaining usufruct can decrease the taxable base.
5. Investments in Tax-Advantaged Schemes
Certain specific real estate investments (historic monuments, rental deficits) can reduce the net taxable value due to particular valuation or partial exclusion rules (source: General Tax Code, articles 975 and following).
Numerical Example of IFI Calculation
A tax household owns as of January 1, 2026:
Primary residence: market value €1,500,000
Rental apartment: value €800,000, outstanding loan €300,000
SCPI shares: value €400,000
Calculation:
Asset
Gross Value (€)
Debts (€)
Net Value (€)
Primary residence
1,500,000
0
1,500,000 - 30% = 1,050,000
Rental apartment
800,000
300,000
500,000
SCPI shares
400,000
0
400,000
Total net taxable
1,950,000 €
Applying the scale:
From 0 to 800,000: 0% → €0
800,001 to 1,300,000 (500,000): 0.5% → €2,500
1,300,001 to 1,950,000 (650,000): 0.7% → €4,550
IFI due = 2,500 + 4,550 = €7,050
Conclusion and Recommendations for French Investors
In 2026, the IFI continues to concern a limited but significant number of tax households with net real estate wealth exceeding €1.3 million. Rigorous asset valuation, consideration of deductible debts, and application of allowances, especially on the primary residence, are essential for accurate calculation.
Investors should prioritize:
Wealth structuring via commercial companies when possible to exclude certain assets from IFI
Optimization of loans related to real estate acquisition
Use of usufruct/bare ownership splitting and donations to reduce the taxable base
Well-documented declarations to avoid tax adjustments
Finally, it is advisable to consult a tax expert to tailor these strategies to the specific situation of each household.
