The property on real estate wealth (IFI) concerns all the property of a person residing in France, but some international tax treaties reserve surprises, notes Dimitar Hadjiveltchev, associate lawyer at CMS Francis Lefebvre.
by Dimitar Hadjiveltchev (Associate Lawyer, CMS Francis Lefebvre Lawyers)
Question to an expert
I bought a house in another country, enter the calculation of the IFI?
The acquisition of a property abroad may result in several consequences, which go rather in the sense of the addition of tax obligations than in that of their subtraction. Thus, the acquirer to international aims should inquire about the existence of taxes payable in the country of destination, but must also take into account that the property tax (IFI) applies to all Real estate detained by a resident person from France, whether they are located in France or abroad.
A good surprise can however come from the reading of international tax treaties, because some grant the country of real estate situation the right to take a wealth tax. However, these conventions often make it possible to apply the IFI in France – its amount will then be simply reduced from the tax on fortune paid abroad.
Some conventions oppose such a repulposition in France. This is the case with those concluded with Mauritius, the Netherlands or Finland. In these few countries, the acquisition of a property abroad can reserve a good surprise with the IFI.
In any event, an informed investor will consider checking all the legal and tax consequences of his project before starting.