Wealth tax and split ownership: who pays, what exemptions in 2026

Quick answer. For the real-estate wealth tax, the principle of article 968 of the French Tax Code is simple: the usufructuary declares the split asset at its full-ownership value, and the bare owner has nothing to declare. Split ownership therefore reduces the bare owner's wealth tax, never the usufructuary's, except in three limited cases where the tax is split between the two under the article 669 scale.

Split ownership is often presented as a lever to optimise the real-estate wealth tax. That is true, but not for everyone, nor in every situation. The code clearly distinguishes the position of the usufructuary from that of the bare owner, and opens only three exceptions to the principle of full taxation on the usufructuary. Understanding this split avoids disappointment, especially when crossing the threshold of 1.3 million euros of net real-estate wealth.

Article 968 of the Tax Code sets a clear rule. Assets burdened with usufruct are included in the usufructuary's wealth at their full-ownership value (guidance BOI-PAT-IFI-20-20-30-10).

The bare owner has nothing to declare for this asset. This rule follows from civil law: it is the usufructuary who enjoys the asset and bears its charges, so it is logical that they also bear the wealth tax on the whole value.

The wealth consequence is direct. Giving the bare ownership of a real-estate asset removes that bare ownership from the recipient's wealth-tax base, but does not reduce the usufructuary's base, who remains taxed on the entire value. It is the bare owner who enjoys the relief, not the usufructuary donor.

Article 968 sets this principle aside in three exhaustively listed cases. In these cases, the asset is split between the usufructuary and the bare owner under the scale of article 669 of the Tax Code, each declaring the fraction that falls to them.

The first exception covers the legal usufruct of the surviving spouse, when it results from the application of inheritance law and not from a voluntary decision. The second concerns the sale of an asset with reservation of usufruct by the seller, provided the bare ownership has not been transferred to a presumptive heir or an interposed person. The third applies when the usufruct was reserved by the donor on an asset given to the State, a local authority, a public body or a recognised public-interest association or foundation.

When the split applies, the value is shared according to the age of the usufructuary at the time of the triggering event.

The article 669 scale sets the value of the usufruct, the balance forming the bare ownership. For a usufructuary aged 51 to 60, the usufruct is worth 50% and the bare ownership 50%. From 61 to 70, the usufruct falls to 40% and the bare ownership rises to 60%. From 71 to 80, the usufruct represents only 30%. The older the usufructuary, the higher the bare-ownership fraction, which changes each party's wealth tax in the cases where the split applies. The detail of this scale is developed in our article on the split-ownership scale and article 669.

One point often disappoints owners who come looking for an immediate cut in their wealth tax.

If you give the bare ownership of your assets to your children while keeping the usufruct, you remain taxed on the full-ownership value of those assets. Voluntary split ownership does not reduce your own base: it prepares transmission and lightens the future wealth tax of your bare-owner children, not yours while you are usufructuary. It is one of the most frequent misunderstandings, which we also address among the drawbacks of split ownership.

The wealth tax only concerns households whose net taxable real-estate wealth exceeds 1.3 million euros on 1 January.

When this threshold is crossed, the scale applies from 800,000 euros, with progressive rates. The main residence benefits from a 30% allowance on its value. Assets used for the professional activity may be exempt under conditions. The provisions on split ownership described here are maintained for 2026, the finance law not having changed the architecture of article 968.

It is when approaching this threshold that split ownership shows its full wealth value, provided you reason about the right taxpayer. Building a coherent strategy means linking the wealth tax to the rest of the real-estate holding, a subject we cover on our real-estate tax accountant page.

Split ownership is an excellent wealth-tax tool, but it mainly acts on the bare owner's base. For a parent who transmits, the effect is not an immediate cut in their own tax, it is the gradual exit of assets from the next generation's base and the preparation of a lighter inheritance.

The three split exceptions cannot be decreed, they follow from the nature of the operation: legal usufruct, sale with reservation, gift to a public-interest body. Trying to artificially trigger a split through a voluntary arrangement is bound to fail, because the principle remains full taxation on the usufructuary. The right approach is to choose the right asset, the right time and the right beneficiary, in line with the transmission objective.

A 64-year-old owner of several rental buildings wanted to give the bare ownership to his two children to lower his wealth tax from the following year. The analysis recalled that, remaining usufructuary of a voluntary split, he would keep being taxed on the full-ownership value: his wealth tax did not move. On the other hand, the gift definitively removed the bare ownership from his children's base and froze the transmitted value. The decision was made for transmission, not for an immediate wealth-tax gain, which avoided a disappointed expectation and refocused the project on its real benefit.