IFI: How shares in companies holding real estate are taxed

Your company shares are included in the tax base for the French wealth tax (IFI), but not for their full value: only for the portion of their value that represents taxable real estate. The calculation is based on the market value of the shares, multiplied by a coefficient (the company's taxable real estate divided by all its assets), and then capped. Certain properties and small shareholdings are excluded from the tax base.

This page follows the BOFiP guidelines and the tax administration's information pages. It does not cover filing and payment dates, the value of unlisted shares, fractional ownership of securities, or the complete conditions for the exemption of business assets. For the tax brackets and personal debts, see the IFI (French Wealth Tax) page for residents.

The principle: the real estate fraction of the shares

The shares or stock held by you and your household are considered for the portion of their value representing real estate assets or rights held directly or indirectly by the company. The BOFiP (Official Bulletin of Public Finances) provides commentary on this point in paragraph 2 of Article 965 of the French General Tax Code (CGI). The version used here has been in effect since June 5, 2024.

All companies and organizations, French or foreign, are affected, regardless of their legal form, tax status, or activity. The tax authorities specify that the securities concerned are listed or unlisted, and that the company's place of business is irrelevant. They also mention units in collective investment schemes (UCITS) and redeemable assurance-vie or capitalization contracts, which must be declared. Assurance-vie is addressed on a dedicated page.

Companies without legal personality (joint ventures, for example) are an exception: the rule of shares does not apply, and their assets are considered to be held directly by the taxpayer.

The threshold for tax liability is €1,300,000 of net taxable assets as of January 1st. A resident is taxed on their assets located in France and abroad, whether direct or indirect. A non-resident is taxed on their assets located in France, subject to applicable tax treaties.

The three-step calculation

This page does not detail the valuation of unlisted shares.

The chains of participation

When your company owns another, we start with the company that owns the buildings at the lowest level of the chain, then we go up level by level.

The company's debts

Company debts not related to taxable assets are not deductible; they are added back to the value of the shares. This clarification was published in the BOFiP (Official Bulletin of Public Finances) on June 5, 2024 (Law No. 2023-1322, Article 27). Anti-abuse rules also apply to certain debts, with exceptions, including loans not primarily taken out for tax purposes. These rules must be examined on a case-by-case basis.

On the personal side, the expenses for acquiring shares are deductible in proportion to the value of taxable real estate.

What comes out of the base

Four clarifications regarding the threshold of 10 %:

• he appreciates himself for capital and for voting rights. With 9 % of the capital but 18 % of voting rights, the exclusion does not apply; ;
• it takes into account all of the household's contributions, direct and indirect. With 8 %s directly and 3 %s via another company, the threshold of 10 %s is reached; ;
• The exclusion falls if you control the company or if you or your household have the enjoyment of the property ;
• industrial, commercial, craft, agricultural or professional activity must in principle be exclusive. The tax authorities allow other activities if the eligible activity remains significantly predominant, which they allow when the assets allocated to it and the related turnover represent at least 80% of the total (BOI-PAT-IFI-20-20-20-20, § 20). A mixed company is therefore not automatically excluded.

Managing one's own assets is not an eligible activity.

Managing one's own real estate assets is not an activity eligible for exclusion, including the rental of unfurnished premises, regardless of their intended use. The BOFiP (French Official Tax Bulletin) states that shares in civil law companies are included in the tax base regardless of the level of ownership.

For holding companies, the BOFiP (Official Bulletin of Public Finances) makes a distinction: certain active holding companies, which participate actively in managing their group's policy and controlling their subsidiaries, are considered commercial holding companies; passive holding companies remain civil holding companies. This classification must be verified in the BOFiP before any decision is made.

Shares representing assets used in a company's eligible business activities may also qualify for the exemption for business assets (Article 975 of the French General Tax Code, BOI-PAT-IFI-30-10-40), subject to conditions specific to the taxpayer, particularly regarding remuneration. These conditions are not addressed here; they should be verified in the BOFiP (Official Bulletin of Public Finances) before any decision is made.

The good faith exception

For the assets held indirectly, No adjustment will be made if you demonstrate, in good faith, that you could not have obtained the necessary information. The burden of proof rests with you. This exception does not apply to directly held assets.

It is ruled out in three cases:

• YOU control the company, control being presumed, unless proven otherwise, from 33.33 % of the rights when no other partner holds more; ;
• you or your household reserve the enjoyment of the property, including by lease; ;
• you hold more than 10 % of capital or voting rights (alternative thresholds).

Request information from the company

Companies must, upon request, provide the taxpayer with the necessary information, including the portion of the share value representing taxable real estate. This obligation applies to each company in the chain, within a reasonable timeframe.

Numerical example (fictitious profile)

Situation. Marc, a resident of France, owns 40 shares (%) in a company subject to corporate income tax (IS) that rents out an unfurnished building worth €3,000,000 and has €1,000,000 in cash and investments. The company has a bank debt of €1,200,000 related to the building. Marc also owns his primary residence, valued at €1,000,000. He has no other assets. Assumptions: the market value of the shares is taken to be equal to Marc's share of the company's net assets (40 shares), without discount; the company has no debt unrelated to a taxable asset; Marc does not control the company; unfurnished rentals are not an activity eligible for exclusion; Marc has no deductible personal debts.

Issue. His direct real estate assets, after a 30% allowance (%), amount to €700,000, below the threshold. What difference do the shares make?

Strategy. Apply the three steps. Total assets: €4,000,000. Net assets: €2,800,000. Market value of the shares: 40 % of €2,800,000, or €1,120,000. Coefficient: €3,000,000 ÷ €4,000,000 = 75 %. Real estate fraction: €840,000. Net value of the building in proportion to the shareholding: (€3,000,000 − €1,200,000) × 40 % = €720,000.

Result. The lowest value is €720,000. The net taxable assets increase to €700,000 + €720,000 = €1,420,000, and the IFI (French wealth tax) amounts to €3,340.

Tax rates used (impots.gouv.fr, page modified on 08/04/2026): 0 % up to €800,000; 0.5 % from €800,000 to €1,300,000; 0.7 % from €1,300,000 to €2,570,000. The discount, reserved for net taxable assets between €1,300,000 and €1,400,000, does not apply to any of the items in the table, since the taxable assets exceed €1,400,000.

The profile is fictitious and the amounts are hypothetical. The calculation ignores caps, gifts, and exemptions. It does not predict your situation.

What changes depending on your situation

• The company's activity and the nature of each of its assets.
• Your percentage of capital and voting rights, including indirect household shareholdings.
• Control of the company and the potential enjoyment of an asset.
• The company's debts: their purpose, date, and justification.
• The length of the chain of ownership.

The rule depends on your situation. No results are guaranteed.