Real-estate inheritance: taxes and duties to pay in 2026

Quick answer. On a real-estate inheritance in the direct line, each child benefits from a 100,000 euro allowance on the share received from each parent, then the progressive scale of 5% to 45% applies. The surviving spouse and the civil-partnership partner are fully exempt. The main residence enjoys a 20% allowance if still occupied by the spouse or a child. Anticipating through gifts and split ownership remains the most powerful lever for reduction.

Passing on a real-estate estate on death raises a very concrete question: how much will the heirs have to pay, and with what money? On real estate, the bill is often heavy and falls at the worst moment, because duties are due within six months of death while the property cannot be sold in a few weeks. Yet these duties follow precise rules, set out in the French Tax Code, and are sharply reduced when you act ahead of time. Here is how the taxation works in 2026 and which levers to use without delay.

The calculation is never made on the total estate, but share by share. Each heir receives a fraction of the estate, to which their own allowance is applied, then the scale matching their family relationship. Understanding this sequence avoids nasty surprises.

The mechanism is always the same: you determine the value of the asset (its market value on the day of death), you split the estate between heirs under civil rules (reserved portion, available quota, the spouse's rights), you deduct each one's personal allowance, then you apply the scale to the balance. On real estate, market value is the sensitive point: an undervaluation exposes you to a tax adjustment, an overvaluation needlessly inflates the taxable base. It is one of the first points we secure in an analysis of a real-estate situation.

The calculation starts with the allowance applicable to each heir, which depends on their relationship with the deceased. It determines the exempt share before any scale.

In the direct line, each child benefits from a 100,000 euro allowance on the share they receive from each parent (Tax Code art. 779). The surviving spouse and the civil-partnership partner have been fully exempt from duties since the TEPA law of 2007, whatever the amount. Other heirs are treated far less generously: 15,932 euros for a sibling, 7,967 euros for a nephew or niece, and a minimum allowance of 1,594 euros where no other allowance applies. A person with a disability may, under conditions, combine an additional 159,325 euro allowance with their personal allowance.

Key point: these allowances rebuild every 15 years for gifts. A suffered inheritance gives only a single use of the allowance; anticipated transmission allows it to be mobilised several times over a lifetime. That is the whole difference between enduring taxation and steering it.

After the allowance, the net taxable share is subject to a progressive scale by bands (Tax Code art. 777). In the direct line, it runs from 5% on the first band to 45% on the highest fraction.

The 20% band covers a very wide range: it is the one borne by the vast majority of average real-estate inheritances. In practice, above the 100,000 euro allowance and up to more than half a million euros per child, each additional euro is taxed at 20%. For distant heirs, the contrast is stark: siblings are taxed at 35% then 45%, relatives up to the 4th degree at 55%, and unrelated persons at 60%, on a share that is barely abated.

The main residence benefits from a special treatment that lightens the taxable base. Its market value is reduced by 20% for the calculation of duties when, on the day of death, it is occupied as a main residence by the surviving spouse, the civil partner, or a minor or protected adult child of the deceased (Tax Code art. 764 bis).

This allowance applies to the value before allocation between heirs: it therefore benefits the whole estate, not only the occupant. On a family home valued at 500,000 euros and occupied by the spouse, 100,000 euros leave the taxable base even before any personal allowance. The rule remains in force in 2026 and recognises the difficulty of quickly mobilising an occupied dwelling.

The best way to reduce inheritance duties is to anticipate, because a suffered inheritance offers very little room. Several tools combine.

Giving during one's lifetime allows the 100,000 euro allowance to be used every 15 years, so potentially two or three times over a lifetime. Split ownership clearly reinforces the effect: by giving the bare ownership and keeping the usufruct, you transmit a reduced base under the tax scale of the usufruct tied to the donor's age, and full ownership rebuilds free of further duty on death. We detail this mechanism and its scale in our articles on split ownership and on the split-ownership scale. Gift-division, for its part, freezes values between heirs on the day of the deed and prevents later conflicts, a subject developed in our guide on gift-division.

To these add the family gift of money of 31,865 euros, exempt every 15 years when the donor is under 80 and the recipient is an adult (Tax Code art. 790 G). And above all, a temporary window not to be missed in 2026: an exceptional family gift of 100,000 euros per donor is exempt, from 15 February 2025 to 31 December 2026, when it finances the purchase of a new or off-plan (VEFA) dwelling used as a main residence, or eligible energy renovation works (Tax Code art. 790 A bis). The ceiling is 300,000 euros per recipient, the asset must be kept for five years, and the funds used within six months.

Life insurance usefully completes this toolkit, because it follows a tax regime separate from inheritance duties. The capital paid to designated beneficiaries largely escapes the scale: for premiums paid before the policyholder's 70th birthday, each beneficiary enjoys a 152,500 euro allowance, then a lighter flat-rate taxation (Tax Code art. 990 I), outside the civil estate. It is particularly valuable in two cases. First for distant or unrelated heirs (nephews, stepchildren, a cohabiting partner), who would otherwise face a scale of 35% to 60% with minimal allowances: a well-drafted policy passes them capital at a far lower tax cost. Second, to give heirs the means to settle the duties owed on real estate without having to sell the asset in a rush: you pass on the bricks on one side, and the liquidity to pay the bill on the other. Life insurance does not replace a real-estate gift, it goes alongside it.

Finally, transmission should not be reasoned over a single generation. Giving directly to your grandchildren lets you skip a generation of duty: the grandparent has their own 31,865 euro allowance per grandchild for gifts (Tax Code art. 790 B), which can be combined with the family gift of money and, where applicable, with the exceptional 100,000 euro gift. A staggered strategy (giving first to the children, then to the grandchildren, with split ownership) spreads the charge over two levels of allowances and avoids the same estate being taxed twice within a single generation. This structure is set case by case, taking account of each person's needs and the reserved portion.

Inheritance duties on real estate are not discovered on the day of death: they are prepared years ahead. In the cases we support, the gap between an anticipated transmission and a suffered inheritance often runs to tens, even hundreds of thousands of euros, for an identical estate. Inaction regularly leaves heirs facing a brutal bill, sometimes payable while the asset is not yet sold, forcing a rushed sale at a poor price.

Our approach is to map the estate, project the duties in the absence of any anticipation, then build a gift calendar that mobilises the allowances at 15-year intervals and split ownership. For rental real estate, holding the assets in a civil property company makes this strategy far more flexible: you pass on shares in instalments rather than an indivisible building. This is work done calmly, in close liaison with the notary for the deeds, and which we integrate into a business owner wealth management approach. Anticipating means turning a suffered charge into a controlled transmission.

A mother held a rental building valued at 600,000 euros and her main residence estimated at 400,000 euros, having organised nothing during her lifetime. On her death, her two children share a taxable estate of around one million euros, that is 500,000 euros each. After the 100,000 euro allowance per child, each one's net taxable share, around 400,000 euros, falls mainly within the 20% band. The duty bill reaches several tens of thousands of euros per child, payable within six months, without the rental building being sold.

The retrospective simulation showed that a gift of the bare ownership of the rental building fifteen years earlier, combined with renewed allowances and the favourable usufruct scale, would have reduced the duties by more than half. The main residence could have stayed within the scope of the 20% allowance by remaining occupied. The episode acted as a trigger for the next generation, which promptly started a gradual transmission of its own real-estate estate, backed by SCI shares.

In practice: securing and organising your transmission#

• Have each asset reliably valued (market value), as it is the basis of any calculation and the leading source of adjustment risk.
• List the family relationship of each prospective heir and the allowance they are entitled to: this determines the real tax pressure.
• Check the 15-year history of gifts: an allowance already partly used is not rebuilt, and the tax recall applies.
• For rental real estate, study the contribution to an SCI before any gift, in order to pass on divisible shares rather than an undivided portion.
• If a child or grandchild buys their main residence, examine the exceptional 100,000 euro gift before 31 December 2026, respecting the deadline for use and the holding period.
• Coordinate each operation with the notary for the deeds and with us for the costed projection of duties.

• The declared market value must be defensible: an undervaluation of the residence or the rental building exposes you to an adjustment with interest and penalties.
• The 20% allowance on the main residence requires effective occupation on the day of death by an eligible person: an empty or rented dwelling does not qualify.
• Gifts made less than 15 years earlier are recalled: they reduce the allowance available on death and can push the taxable share into a higher band.
• The exceptional 100,000 euro gift (art. 790 A bis) is strictly conditioned (new or off-plan dwelling, or eligible energy renovation, use within six months, five-year holding): a non-compliant use loses the exemption.
• A poorly calibrated split ownership (usufruct kept too long, values badly allocated) may be reclassified or create tension between bare owner and usufructuary: the deed must be drafted carefully.
• Inheritance duties are in principle payable within six months, even if the asset is illiquid: instalment or deferred payment must be anticipated, not discovered in a rush.