IFI 2026: threshold, scale and taxable assets

Quick answer. You are liable for the 2026 IFI if your net taxable real estate wealth exceeds 1,300,000 euros on 1 January 2026, assessed at household level. The progressive scale remains unchanged and applies from 800,000 euros. A main home held directly benefits from a 30 percent allowance.

The French real estate wealth tax, the IFI, is far from anecdotal for a director who owns business premises, SCI shares or a rental portfolio. Each year the same questions return in meetings: from what amount am I concerned, how is the tax actually computed, which assets fall within the base, and what can I deduct. The 2026 news lies mainly in what does not change. The so-called tax on unproductive wealth, discussed during the debates on the 2026 finance bill, was not adopted. The IFI remains unchanged: same rules, same scale, same base.

This article gives you the complete reference for 2026, with thresholds, scale, taxable and exempt assets, deductible liabilities and the filing calendar. Our aim is not to recite a statute, but to show you where the trade-offs and pitfalls we most often see in wealth files actually sit.

The IFI liability threshold is set at 1,300,000 euros of net taxable real estate wealth on 1 January 2026. This threshold is assessed at the level of the tax household, not per person. A married or civil-partnered couple therefore adds up all of its real estate, including that of minor children under its legal administration.

One point is frequently misunderstood: once the 1,300,000 euro threshold is crossed, the tax calculation does not start at 1,300,000 euros, but from 800,000 euros. In other words, the 1,300,000 euro threshold triggers liability, and the scale bites from 800,000 euros. Net real estate wealth of 1,290,000 euros is not taxable. Wealth of 1,310,000 euros is, and the first taxed band corresponds to the fraction between 800,000 and 1,300,000 euros.

The wealth retained is net wealth: you take the value of taxable assets on 1 January, deduct the admitted debts relating to those assets, and the result is compared with the threshold and then subjected to the scale.

The IFI scale is progressive and set by article 977 of the French general tax code. It has been unchanged since 2018. It applies in bands to the net taxable value of real estate wealth.

The scale works like the income tax scale: each band is taxed only at its own rate. The whole estate is not subject to the highest marginal rate.

The relief for wealth close to the threshold#

To avoid an abrupt threshold effect, a relief mechanism applies to wealth between 1,300,000 and 1,400,000 euros. The tax reduction equals 17,500 euros, reduced by 1.25 percent of the net taxable value of the wealth. The closer the wealth gets to 1,400,000 euros, the smaller the relief, until it disappears beyond that point.

This relief explains why, just above the threshold, the tax remains modest: it smooths the entry step into the IFI.

The IFI base, defined in articles 964 and following of the general tax code, is strictly real estate. Taxable items include all real estate assets and rights held directly, but also the real estate fraction of certain companies and investments. It is this second component that surprises most.

For company shares, the taxpayer must determine the share of value corresponding to the real estate held by the company, directly or indirectly. A wealth SCI holding rental property will therefore be taken into account for its real estate value. An SCPI or OPCI will likewise be included, up to the underlying real estate.

Treatment of the main home#

The main home held directly benefits from a 30 percent allowance on its market value on 1 January. If your main home is valued at 1,000,000 euros, it enters the base only up to 700,000 euros. This allowance does not combine with other standard allowances on the same asset, and it does not apply where the home is held through an SCI in which you are a partner, save in specific cases.

Our reading of the base#

The tipping point, in most files we handle, is not the obvious property that everyone declares. It is real estate held indirectly: family SCI shares, SCPI held within a contract, real estate of a company not used for its business. Many taxpayers reason that they only own a main home and a rental flat, and forget that their real estate company shares also count. That is where gaps with the tax authority arise.

Only debts relating to taxable assets are deductible, provided they exist on 1 January 2026 and are borne by the taxpayer. The logic is simple: you only deduct what finances or encumbers a taxable asset.

Checklist of liabilities usually deductible:

• Ongoing real estate loans relating to taxable assets, for their capital outstanding on 1 January
• Improvement, construction or reconstruction works incurred and not yet paid
• Property tax relating to taxable assets (excluding the household waste levy)
• Taxes due in respect of the relevant properties
• Debts contracted to acquire company shares, up to their taxable real estate value

Conversely, debts relating to exempt assets, loans contracted from members of the tax household under certain conditions, and debts linked to out-of-scope assets are not deductible. For large estates, a liability capping mechanism limits the deduction of debts above a given level of wealth, to prevent artificial over-indebtedness arrangements.

The underestimated risk#

In the IFI reassessment files we encounter, the most frequent error does not concern the scale, which is computed mechanically. It concerns the liabilities. Either the taxpayer deducts a debt attached to an exempt asset, or an ineligible family loan, or retains the initial loan amount instead of the capital outstanding. Each of these errors inflates the deduction and weakens the return. Securing the liabilities is, in our view, the most rewarding exercise before sending the 2042-IFI.

The IFI is subject to a cap. The sum of the IFI and the income tax of the previous year cannot exceed 75 percent of that year's income. Where this cap is exceeded, the excess is deducted from the IFI due.

This mechanism protects taxpayers with substantial real estate wealth but moderate income, a classic situation for directors who have opted for low remuneration or who hold a highly valued but illiquid estate. The cap nonetheless requires a careful reading of the income retained, as not all income is taken into account in the same way.

Take the deliberately anonymised example of an Ile-de-France SME director. He owns his main home, valued at 1,200,000 euros, a rental flat worth 400,000 euros, and 50 percent of a family SCI whose real estate share attributable to him comes out at 350,000 euros. The walls of his business, leased to his operating company and potentially exempt as business assets, are analysed separately.

On the purely patrimonial side, the main home is retained only after the 30 percent allowance, i.e. 840,000 euros. Adding the rental flat and the SCI share, the gross base approaches 1,590,000 euros. He must then deduct the capital outstanding on his real estate loans relating to these assets. Depending on the level of debt, the net taxable wealth may fall back below the threshold or remain above it.

What this case illustrates: two directors with apparently identical wealth can find themselves, one liable, the other not, depending on the main-home allowance, the actual real estate share of their property companies and the state of their loans. It is this combination, not an isolated figure, that determines the tax.

The IFI is filed at the same time as the income tax return, using the 2042-IFI annex attached to the income return. The filing deadlines are therefore those, staggered by geographic zone, of the annual income return campaign.

Steps of the IFI return:

1. List, as at 1 January 2026, all your real estate assets and rights, held directly and through your companies.
2. Value each asset at its market value on 1 January, apply the 30 percent allowance to the main home and determine the real estate share of your company shares.
3. Identify exempt assets (business assets, woodland and forests under commitment) and exclude them from the base.
4. List and quantify deductible liabilities, retaining the capital outstanding on loans on 1 January.
5. Report the net taxable wealth on the 2042-IFI annex and apply the scale, and where relevant the relief.
6. Attach the 2042-IFI to your income return and meet the deadline for your zone.

What the tax authority looks at#

The tax authority pays particular attention to asset valuation, in particular the declared market value of property and the real estate share of companies. A clear undervaluation of the main home or a rental asset, like an excessive discount for dismemberment or for indirect holding, are classic audit points. Keeping the comparison evidence used for the valuation is, in practice, your best protection.