The importance of the tax domicile in the context of the IFI
Depending on your place of residence and your professional activity, the criteria for taxing your real estate may vary. A look back at the IFI's implementation procedures.
What goods are subject to the IFI?
Replacing the ISF on 1 January 2018, the Real Estate Wealth Tax applies to all taxpayers with real estate assets valued at more than €1.3 million. However, the tax grid for this measure may vary depending on your place of residence and whether you carry out your professional activity abroad.
Which taxation according to the tax domicile?
Tax domicile in France
As soon as you are considered as a resident on French territory by the tax authorities, then all your real estate assets are included in the calculation of the tax on your property, whether it is in France or abroad. To locate your tax domicile, the administration is interested in various elements:
- If you reside in France for more than half of the year, you are subject to the IFI on all your real estate in France and abroad.
- As soon as your main professional activity is in France, you are domiciled for tax purposes in France.
- Your tax residence is in France if your main economic interests are located on the national territory (company headquarters, investments, property administration)
Tax residence abroad
If your tax domicile is not located in France according to the criteria defined by the tax authorities, then the IFI will only apply to your French real estate assets. In calculating the total amount of your real estate assets, the assets you own abroad are therefore not taken into account.
How do international conventions apply?
In order to avoid the application of double taxation for taxpayers sharing their real estate assets between France and abroad, international conventions between countries are now in force. If you are domiciled abroad or have real estate assets abroad, an international agreement between France and the country concerned applies to your situation. In all cases, the international convention has priority over the IFI.
What happens if I return to France?
If you were only subject to the IFI on your real estate assets held in France and you return to France, your tax schedule will take into account all your assets in France and abroad from the following year.
A temporary exemption may apply if you were domiciled abroad for five years and your tax residence is now in France. During the five years following the establishment of your tax domicile in France, you will only be taxed on your real estate located in France.
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