IFI: furnished rental of professional property and business premises

Furnished rental properties can be treated as business assets and excluded from the scope of the French wealth tax (IFI). The official tax guidelines (BOFiP) specify two thresholds: annual revenue exceeding €23,000 and income exceeding 50% of the household's taxable income derived from this activity (the guidelines refer to this as business income). The guidelines for the 2042-IFI 2026 tax return add that the rental must be the owner's primary activity; paragraph 60 of the BOFiP, which sets the two thresholds, does not mention this condition. The information provided does not definitively resolve these two interpretations: verify them with the relevant official texts.

These conditions are not those of the professional furnished rental status for income tax purposes. The income tax test does not have a threshold of 50 %. The two tests are examined separately.

The principle: business assets are exempt.

Real estate assets used for professional activity carried out as a sole proprietorship, as the principal activity, are fully exempt from the French wealth tax (IFI). The 2042-IFI 2026 information sheet and the 2026 income tax guide outline the following conditions.

• The goods are used in an industrial, commercial, craft, agricultural or professional activity.
• The activity is carried out by the owner or his spouse; the notice adds the civil partner, the cohabiting partner and minor children placed under legal administration.
• The activity is the taxpayer's main occupation.
• Real estate assets or rights are necessary for the exercise of this profession.

Fact sheet F563 on service-public.gouv.fr lists furnished rental properties under the professional furnished rental regime among those eligible for exemption under certain conditions. The BOFiP (BOI-PAT-IFI-30-10-10-10, version in force as of 02/05/2019) specifies that furnished rentals are, under certain conditions, a commercial activity qualifying for exemption.

The specific conditions for furnished rentals

The recipes. They refer to the actual amount of sums received under the lease agreements: rents, charges, taxes and expense reimbursements.

The threshold of 50 %. The household income considered includes wages and salaries, industrial and commercial profits, agricultural profits, non-commercial profits, and the income of managers and partners as defined in Article 62 of the French General Tax Code (CGI). The numerator is the annual net commercial profit from furnished rentals, determined according to paragraph 2 of Article 38 of the CGI. This is compared to the household's net income in these categories, including rental income, after deduction of expenses and allowances.

The premises. Only premises that are actually rented out, i.e., those that generate income for the tax household, can be eligible.

The main activity. This page mentions the condition of the notice without defining it. Paragraph 60 of the BOFiP does not mention it, while the introduction of the BOFiP refers to activity carried out "as a principal activity": the wording used should be verified against the texts, on a case-by-case basis.

What remains outside the field

• Unfurnished rental. Unfurnished properties rented as part of a private portfolio are not considered business assets (BOFiP, paragraph 140). Managing one's own real estate portfolio is excluded from commercial activity (paragraph 30). According to the explanatory note (page 3), properties rented or made available to a third party cannot, in principle, be classified as assets used for the owner's business activity; the note mentions an exception when the rental serves the exclusive needs of the owner's primary business activity.
• The true profession. The BOFiP (Official Bulletin of Public Finances) requires the exercise of a genuine profession, which implies regular and consistent activity, for profit and on one's own behalf. Registration with the trade and companies register is one indicator among others.
• Company shares. economie.gouv.fr indicates that shares or stock representing real estate used for professional activity are exempt from the French wealth tax (IFI) when the owner carries out their main professional activity there. Furnished rentals operated through a company are not addressed here.

Wealth tax test and income tax test

The status of professional furnished rental provider for income tax follows another text, BOI-BIC-CHAMP-40-10 (version of 15/04/2026).

The official tax guidelines (BOFiP) for the IFI (French wealth tax) and those for income tax do not measure the same thing. Examining one does not exempt you from examining the other.

To announce

According to the 2026 Income Tax Guide (Wealth Tax chapter), the section "Assets Used for Professional Activity and Exempt (Appendix 1)" of form 2042-IFI includes box 9BZ: the guide states, "You have completed and filed Appendix 1, check the box." The content of Appendix 1 is not detailed here. Please review the 2042-IFI instructions for your specific situation.

Numerical example (fictitious profile): two furnished studios, 52.4 % or 42.3 % of household income

Situation. A couple residing in France owns their primary residence, valued at €900,000, and two furnished studio apartments, with a total value of €700,000, as of January 1, 2026. They have no debts. Rental income is €34,000 per year, resulting in a net profit of €22,000. The spouse has a net taxable income of €20,000 in scenario A and €30,000 in scenario B. It is assumed that the primary activity requirement is met.

Issue. Are studios exempt from the IFI (French wealth tax)?

Strategy. Test the two numerical thresholds. The €34,000 in revenue exceeds €23,000. The share of rental income in the household income (rental income and spouse's salary) is €22,000 out of €42,000 in case A, and €22,000 out of €52,000 in case B. Then recalculate the base: the main residence is valued at €630,000 after the 30% allowance.

Result.

In case A, the tax base of €630,000 is below the threshold of €1,300,000: no IFI (French wealth tax) is due. In case B, the tax base reaches €1,330,000, i.e., €630,000 plus €700,000. The 2026 tax brackets provide €2,500 on the portion between €800,000 and €1,300,000 and €210 on the next €30,000, totaling €2,710. The discount is €17,500 minus 1.25 times the % (taxable income) of €1,330,000, i.e., €875.

The profile is fictitious and the values are assumed. The calculation does not take into account debt, limits, or donations, and does not predict the outcome of your situation.

What changes depending on your situation

• The actual amount of your rental income and profit.
• The income of all members of your tax household.
• The nature of the premises: rented furnished, rented unfurnished or occupied.
• Ownership either directly or through a company.
• The assessment of the main activity.
• Your debts, your primary residence and the rest of your real estate assets.

No results are promised: the rule depends on your situation.