The IFI, or Impôt sur la Fortune Immobilière, applies when your net taxable assets reach 1.3 million euros. Like the ISF, it is divided into 6 tax brackets ranging from 0 to 1.50%. However, there are some legal tricks that can reduce the amount of your IFI. Find out everything.
One of the best ways to reduce the amount of your Real Estate Wealth Tax is to make a donation to a public body. For example, you can consider making your donation for the benefit of an IFI donation. In this case, you benefit from a tax reduction, the amount of which is equivalent to 75% of the value of the donation you have made.
For example, imagine that you have to pay an IFI which amounts to 6,500 euros. Subsequently, you decide to pay 7,000 euros to Fondation de France, an association which acts in all areas of general interest. You then benefit from an IFI reduction of (7,000 euros x 75%), or 5,250 euros. In the end, your Real Estate Wealth Tax is therefore (6,500 – 5,250) euros, or 1,250 euros.
You can transfer the usufruct of your properties to your children for 5 to 10 years in order to benefit from a reduction in your IFI. Indeed, the value of the property will not be declared for the duration of the agreement. The only condition is that the usufructuaries are detached from your tax household. The latter will then take care of the declaration of full ownership.
The real estate that you offer for professional furnished rental is excluded from the IFI, if however the following conditions are met:
As a reminder, the IFI is only calculated on the value of your net assets. As a result, you can reduce the amount of your taxes by taking out the maximum mortgage loan to acquire your property. But beware, this option is also subject to a few conditions. For example, family loans and loans in fine are not supported.
The options listed above are among the most practical and advantageous for reducing your IFI, and even escaping it in some cases. Nevertheless, there are still other tricks such as investing in green real estate such as forests or capping the IFI. In the end, you can make relatively considerable tax savings, provided you follow the established rules.