Properties on the Corsican coast easily exceed the threshold for IFI, France's property wealth tax. An accurate valuation, appropriate ownership structure and advance inheritance planning help avoid an unmanaged tax burden year after year.
Tax threshold
1 300 000 € in net assets
Main residence
30 % allowance
Scale
0,5 % to 1,5 %
Gift to a direct-line relative
100 000 € per parent per child every 15 years
Property wealth tax (IFI) applies to net taxable property assets exceeding €1.3 million on 1 January. This includes main and second homes, rental properties, land, and the property component of certain company shares and shares in property investment companies (SCPI).
Debts relating to taxable properties — outstanding mortgage principal, works, property tax — are deductible. A main residence benefits from a 30 % allowance on its market value.
The valuation must reflect the property's actual market value, not an asking price. Discounts are accepted and frequently justified in Corsica: joint ownership, divided ownership rights, a tenanted property, a right of way, restrictions under the loi Littoral coastal planning law or PADDUC zoning that limits development.
A documented valuation, supported by comparable transactions, helps substantiate the declaration in the event of an audit. This is the purpose of our written expert valuation, which can be relied upon in legal proceedings.
Gifting bare ownership while retaining usufruct — the right to use the property and receive its income — remains the central tool: it removes the value of the bare ownership from the estate to be passed on at a lower tax cost, while retaining use of the property. A family SCI, a French property-holding company, makes management easier and avoids the joint-ownership deadlocks so common on the island.
Properties in Corsica have long suffered from a lack of title deeds. Updating land registry records and reconstructing title deeds, prerequisites for a smooth transfer, should be started well in advance with the notary.