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 clear: 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 situations (legal usufruct of the surviving spouse, sale with reserved usufruct, gift to a public-interest body) where the tax is split between the two under the article 669 scale.

Split ownership is often presented as a lever to reduce 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 a limited number of 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 taxable real-estate wealth. This article sets out the real mechanics, the full article 669 scale, a worked example comparing split ownership with keeping assets intact, and the trap that comes up most often in our wealth files.

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, collects the rents and bears the charges, so it is logical that they also bear the wealth tax on the whole value. The bare owner, who receives no income from the asset while the usufruct lasts, is not taxed on a fraction that earns them nothing.

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. We set out this general logic in our in-depth article on split ownership.

Article 968 sets this principle aside in 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. They can be grouped into three broad categories.

The first covers the legal usufruct of the surviving spouse, when it results from the application of inheritance law and not from a voluntary decision. This legal usufruct covers several situations set out in the Civil Code, notably the surviving spouse's usufruct where there are descendants: this should be checked case by case against the deed of devolution, since the precisely legal origin of the usufruct governs whether the split applies. The second category 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.

What these situations have in common is that they are not decided for tax reasons: they follow from the very nature of the operation. That is what distinguishes them from an ordinary voluntary split, where the principle of full taxation on the usufructuary applies without exception.

When the split applies, the value is shared according to the age of the usufructuary on the triggering date, namely 1 January of the tax year. The article 669 scale sets the value of the usufruct in age brackets, the balance forming the bare ownership. The older the usufructuary, the higher the bare-ownership fraction, which mechanically shifts the wealth-tax charge towards the bare owner in the only cases where the split applies.

The text reasons by full-year age thresholds. In practice, the percentage retained is that of the bracket in which the usufructuary's age falls on 1 January.

A worked example makes the logic tangible. For an apartment valued at 1,000,000 euros and a surviving spouse usufructuary aged 75, the age falls in the under-81 full-years bracket: the usufruct represents 30%, i.e. 300,000 euros declared by the usufructuary, and the bare ownership 70%, i.e. 700,000 euros declared by the bare owner. The detail of this scale and its uses 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 we encounter. The same caution applies to quasi-usufruct, whose civil and tax effects deserve their own review: we cover it in our article on the advantages and drawbacks of quasi-usufruct.

Split ownership does not only concern directly held buildings. It also covers shares in real-estate-heavy companies and split SCPI units. The logic of article 968 carries over: the usufructuary of the shares in principle declares the full-ownership value of the real-estate fraction those shares represent, unless one of the split situations applies.

Family SCI wealth structures frequently combine corporate holding and split ownership, which complicates the base calculation: you must first rebuild the underlying real-estate value, then apply the usufruct rule. We handle these arrangements on our dedicated SCI page, and the specific case of split SCPI units in our article on SCPI 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 progressive scale applies from 800,000 euros. The first brackets are taxed at 0.5% then 0.7%, and the top marginal rate, set at 1.5%, only applies to the fraction of wealth above 10 million euros: it is therefore not a rate that hits the whole estate. The main residence benefits from a 30% allowance on its value. Assets used for a professional activity may be exempt under conditions.

The provisions on split ownership described here are maintained for 2026: the finance law has not changed the architecture of articles 968 and 669. It is when approaching the 1.3 million euro 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 and to the transmission timetable, a subject we cover on our real-estate tax accountant page.

An owner's real question is not theoretical, it is figures. "For my estate, what changes if I split ownership instead of keeping my assets intact?" The table below illustrates the effect of a gift of bare ownership to children, with the usufruct kept by the parent. The figures assume an estate made up solely of rental real estate, with no main residence and no debt, and reason about the taxable base on 1 January. They are indicative and must be recalculated on your real situation.

The message of the table is deliberately blunt: for a voluntary split, the usufructuary parent's wealth tax does not move, whatever their age. Age and the article 669 scale play no part either in the usufructuary's base or in computing their wealth tax on those assets. The only real gain is elsewhere: the gifted bare ownership leaves the children's wealth-tax base for good, and the transmitted value is frozen at the date of the deed for the future inheritance. Where age matters is only in the split situations (legal usufruct of the surviving spouse, sale with reservation, gift to a public-interest body), where the scale above actually shares the value between the two parties.

Our view: split ownership acts on the heir, not the donor#

In our files, 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. Selling this operation as a short-term personal wealth-tax gain leads to programmed disappointment.

The split situations 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, and the tax authority readily recharacterises arrangements whose only purpose is tax. The right approach is to choose the right asset, the right time and the right beneficiary, in line with the transmission objective. For significant estates, this reasoning belongs to a global review within our owner wealth management engagement.

A 64-year-old owner of several rental buildings and a main residence shows us a net taxable real-estate wealth of about 2.4 million euros. He wanted to give the bare ownership of his buildings 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 by a single euro. On the other hand, the gift definitively removed the bare ownership from his children's base and froze the transmitted value at the date of the deed, which prepared a much lighter inheritance. The decision was finally made for transmission, not for an immediate wealth-tax gain. This clarification avoided a disappointed expectation and refocused the project on its real benefit, while reserving any personal wealth-tax arbitrage for other levers, such as the professional use of certain assets.

In practice: securing the right wealth-tax treatment of a split asset#

• Identify the nature of each split: voluntary (taxation principle on the usufructuary) or falling under one of the split situations.
• For a legal usufruct of the surviving spouse, keep the deed of notoriety or the inheritance settlement that establishes its legal origin.
• On 1 January, determine the usufructuary's age to apply the article 669 scale in the split cases only.
• Rebuild the underlying real-estate value before applying the usufruct rule for split SCI shares or SCPI units.
• Check the 30% allowance on the main residence and the possible exemption of professional assets.
• Document each valuation: it is the declared value that will be examined in the event of an audit.

• Voluntary split ownership never reduces the wealth tax of the usufructuary donor: do not present it as an immediate personal gain.
• The split exceptions are strictly construed: a voluntary arrangement designed to trigger the split risks recharacterisation.
• In a sale with reserved usufruct, the split falls away if the bare ownership is transferred to a presumptive heir or an interposed person: the asset becomes fully taxable again on the usufructuary.
• The age used for article 669 is that of the usufructuary on 1 January, not at the date of the initial gift.
• For SCI shares and SCPI units, the base is calculated on the underlying real-estate value, not on the nominal value of the shares.
• The entry threshold remains 1.3 million euros, but the scale is computed from 800,000 euros: an estate just above the threshold is taxed on a wider base than people expect.