Got French real estate? IFI hits at €1.3M, no escape via ownership structure.

The Impôt sur la Fortune Immobilière replaced France's old ISF in 2018. It's a wealth tax on net real estate holdings above €1.3 million. The Indian-side counterpart is Section 9 source rule and the India-France DTAA.

Who pays:

French tax residents on worldwide real estate (subject to treaty carve-outs).

Non-resident owners (including Indian-resident Indians) on French-located real estate only.

Who doesn't pay:

Residents in the first 5 calendar years of arriving in France (the régime des impatriés exemption on foreign assets).

Owners of property used for professional activity (under specific conditions).

For an Indian-French banker living in Paris with a €2.5 million Paris flat plus a ₹4 crore Bengaluru flat, IFI applies on both unless you've negotiated treaty exemption. For an Indian-resident Indian holding a €1.5 million Côte d'Azur villa, IFI applies on the villa, and that's the entry point most aren't aware of.

Net real estate value (after deductible debts) brackets and rates:

€0 to €800k: 0%.

€800k to €1.3M: 0.5%.

€1.3M to €2.57M: 0.7%.

€2.57M to €5M: 1%.

€5M to €10M: 1.25%.

Above €10M: 1.5%.

The €1.3M threshold is the entry point; below that, no filing.

For a €2 million net real estate position: tax is roughly €4,500 (approx. ₹4 lakh) per year. For €5 million: roughly €30,000 (~₹27 lakh) per year. The marginal pinch grows fast above €5M.

Deductible debts: mortgages on the included properties, transfer taxes payable, professional debts secured against included real estate. The deduction is capped at the property's fair value.

The India-France DTAA's non-discrimination clause doesn't exempt Indian property from IFI for French residents. The provision protects Indian-French citizens from being treated worse than French citizens; both pay IFI on worldwide property under the same rules.

For French-resident Indians, the Indian flat shows up on their IFI declaration alongside their French property. Treaty doesn't shield it.

For Indian-resident Indians holding French property, IFI applies only on the French property. India's Schedule FA disclosure picks up the same property under the Black Money Act 2015 ₹20 lakh safe harbour.

Section 9 of the Income-tax Act treats Indian property income (rental, capital gains) as Indian-source for Indian-resident Indians regardless of foreign IFI. The two systems run independently; no double-tax credit on IFI itself.

A Paris-based Indian banker (5 years in France, past the impatriés exemption) owns:

Paris flat: €2.5 million (mortgage outstanding €1 million).

Bengaluru flat: ₹4 crore (~€440,000).

Net real estate for IFI:

Paris: €1.5 million net.

Bengaluru: €440,000.

Total: €1.94 million.

IFI calculation (2026 brackets):

€0 to €800k: 0%.

€800k to €1.3M: €500k × 0.5% = €2,500.

€1.3M to €1.94M: €640k × 0.7% = €4,480.

Total IFI: €6,980 (~₹6.3 lakh) per year.

India-side: Schedule FA picks up the Bengaluru flat (above ₹20 lakh safe harbour) and the Paris flat. No Indian-side wealth tax (India abolished its own wealth tax in 2015). Only India-side filing implication is the disclosure.

We handle the Indian side. The IFI declaration and French real estate appraisal need a French notaire or Expert-Comptable. We coordinate with theirs.

Indian-side scope: Schedule FA filings, NRO interest recovery via the 10% Article 11 treaty rate, ITR-2 with foreign-asset disclosure, Section 119(2)(b) condonation for past years, Form 10F refile.

Fee: ₹14,999 flat for the cross-border planning. Annual filing: ₹4,999 flat per year, including Schedule FA disclosure of French property.

If you've owned French real estate above €1.3M and you haven't run the IFI plus India-side disclosure check together, book free CA appointment for the 15-minute walkthrough. Most engagements identify a Schedule FA gap that's been quietly accumulating.

Q: I'm a French citizen of Indian origin. Does IFI work differently?

A: No. Citizenship doesn't change IFI. Tax residency in France + net real estate over €1.3M = filing required. Citizenship only matters for the impatriés régime (only available to first-time French residents who weren't tax-resident in any of the 5 prior years).

Q: I rent out my Paris flat and the rental income is in India. Does that change anything?

A: No. IFI is a wealth tax on the value of the real estate, not the income. Rental income is separately taxed in France under regular income tax rules.

Q: I sold my Paris flat in 2025. IFI for that year?

A: IFI is computed on 1 January positions. If you owned the flat on 1 January 2025 above the threshold, you owe IFI for 2025. Sale during the year doesn't reduce the year's liability.

Q: I'm moving from Paris back to India in 2026. Last year of IFI?

A: 1 January 2026. If you were French-resident on 1 January 2026 with worldwide property above €1.3M, you owe IFI for 2026. From 1 January 2027, only French-located property counts.

Q: Can I deduct my Bengaluru flat's mortgage against IFI?

A: Yes if the mortgage is secured against the Bengaluru flat itself. Cross-collateral loans (mortgage on Paris flat secured against Bengaluru flat) get partially disallowed. Book free CA appointment for the structuring.