Property wealth tax: which properties are concerned?

HomeTaxationProperty wealth tax: which properties are concerned?

Some people with very high property values may be subject to property wealth tax. However, not all types of real estate are eligible. This is explained below.

What is the real estate wealth tax and how does it work?

  • Who is affected by the IFI? The IFI replaces the solidarity tax on wealth at the beginning of 2018 and applies to any person whose real estate assets have a value of more than €1.3 million (i.e. the same amount as for the ISF). The person must of course depend on the French tax systems (having a home in France, working in France or having an economic activity in France even if residing abroad).
  • When to declare the IFI? When to declare the IFI : the declaration of the tax on real estate wealth and the declaration of income must be done at the same time either between April and June.
  • Consideration of the composition of the tax household: as regards the tax household that is taken into account in this calculation, there are small differences with the one taken into account for the calculation of income tax. For example, the assets of your spouse, partner or civil union partner are taken into account even if they are taxed separately. However, the assets of a child who has reached the age of majority and is still in the same tax household as his or her parents are not taken into account. It may also be subject to the IFI if it reaches the required value in real estate assets.
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What property assets are taken into account?

As already mentioned, the person must be domiciled in France for tax purposes and the assets taken into account are those held on 1 January of the year in question. The assets taken into account are net taxable assets or even the net tax base. We speak of net wealth because debts are not taken into consideration. There is a fairly simple formula for calculating this: net taxable assets = value of gross assets - an allowance of 30% on the value of the main residence (calculated on its real market value) - deductible debts. Note also that real estate held abroad is also counted.

The persons concerned may own real estate directly. In this case, the property may be already built, under construction or unbuilt (greenfield or agricultural land). The property may also be owned indirectly, for example through shares in a real estate investment company. A number of properties intended for business use are excluded.

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