IFI 2026: business-assets exemption and optimisation for the company director

Quick answer. The real-estate wealth tax (IFI) hits only net taxable property wealth above EUR 1,300,000 on 1 January, on a scale of 0.5 % to 1.5 %. Real estate used for the director's main professional activity is in principle exempt as a business asset (Article 975 of the French tax code), and premises held by an operating company for its business fall outside the base. For the director, the levers are clear: allocate the property to the business, deduct eligible liabilities, and trigger the cap (IFI + income tax + social levies capped at 75 % of income).

Since the ISF was replaced by the IFI in 2018, only real estate is taxed: financial investments, savings and shares in operating companies are essentially excluded. The 2026 Finance Act makes no structural change: the threshold, scale, allowances and exemptions remain identical.

For a director, the stakes are twofold. On one hand, their operating real estate may, under conditions, escape the IFI. On the other, their personal or income-producing real estate remains taxable. Clearly distinguishing the two, and structuring holding accordingly, often makes the difference between being liable or not. This is a topic we handle through coherent director's wealth management, aligned with remuneration and succession.

• Threshold. You are liable if your net taxable property wealth exceeds EUR 1,300,000 on 1 January. Once crossed, the calculation starts at EUR 800,000.
• Scale. The calculation is by bracket: 0.5 % from EUR 800,000 to 1.3m, 0.7 % from 1.3 to 2.57m, 1 % from 2.57 to 5m, 1.25 % from 5 to 10m, and 1.5 % above EUR 10m.
• Reduction. Between EUR 1,300,000 and 1,400,000, a reduction smooths the entry into the tax (EUR 17,500 − 1.25 % of net taxable wealth).
• Main residence allowance. The main residence benefits from a 30 % allowance on its value.
• Base. Only real estate is concerned: assets held directly, SCI shares, and the property fraction of company shares (retained pro rata to the value of buildings not used for the business), except real estate used for an operating activity.

This is the central lever for a director. Real estate used for the main professional activity and necessary for its conduct is exempt from IFI.

• Eligible activity. Industrial, commercial, craft, agricultural or professional.
• Main occupation. The activity must constitute the bulk of the taxpayer's economic activities, with the effective exercise of a management role and normal remuneration.
• Necessary asset. The property must be used for the needs of the business.

Practical consequence: premises held by the operating company and used for its business are not taken into account in the taxable value of the shares. Conversely, an income-producing building held by that same company, unconnected to the business, remains in the base. How you hold your business premises therefore directly affects the IFI.

Deductible liabilities (Article 974 of the tax code)#

Debts relating to taxable assets reduce the base: acquisition or works loans, certain taxes (property tax). Anti-abuse measures nonetheless frame the deduction, notably for interest-only loans and loans granted by a relative or a controlled company. The consistency of declared liabilities is a recurring point of attention.

The cap (Article 977 of the tax code)#

The total of IFI, income tax and social levies cannot exceed 75 % of the income of the previous year. The excess reduces the IFI. This mechanism protects taxpayers whose property wealth is large relative to modest income, but it requires careful management of declared income.

Dismemberment and IFI. Beware a misconception: in case of dismemberment, it is in principle the usufructuary who declares the asset at its full ownership value (Article 968 of the tax code), save for a statutory split. Dismemberment is therefore not, on its own, a tool for erasing the IFI. We recall this in connection with acquiring premises through dismemberment.

The holding company. Holding real estate via a holding company does not suffice to exempt it: what counts is allocation to the business, as we explain regarding the taxation of holding companies.

Remuneration. The business-assets exemption requires an effective management role and normal remuneration. A director who does not pay themselves enough may weaken the qualification, a point we cross-check with director's remuneration optimisation.

• The exemption is not automatic. It requires a main activity, an effective management role and an asset genuinely necessary for the business.
• Income-producing real estate stays taxable. Housing it in an operating company does not make it professional.
• Liabilities are framed. Interest-only and family loans are subject to specific deduction rules.
• Dismemberment does not erase the IFI. The usufructuary is in principle liable on the asset's full value.
• The declaration must be consistent. IFI is declared with income tax; the valuation of real estate must be honest and documented.

Recently, a director worried about becoming liable for the IFI because of the value of his company's premises, held by his operating company. The analysis showed that these premises, allocated to the business and necessary for the operation, were business assets and therefore outside the taxable value of his shares. By contrast, a small rental building held directly did have to be declared. The full wealth review let us correctly calibrate his IFI, activate the deductible liabilities and check the value of the cap.

Our conviction, as accountants registered with the Ordre, is that the IFI is steered first through structuring: what is allocated to the business, what belongs to private wealth, and how financing and remuneration fit together. Lawful optimisation rests on solid qualifications, not fragile arrangements. It is in-depth work, carried out with the director and, where appropriate, the notary.

Hayot Expertise advice. Start by mapping your real estate: what is allocated to the business (potentially exempt) and what is not (taxable). Check that the business-asset conditions are met: main activity, management role, normal remuneration, necessary asset. Then list the deductible liabilities and test the 75 % cap. And beware misconceptions, particularly on dismemberment: have your situation validated before you declare.