Owning a French apartment or an SCI while living abroad: why the wealth tax and the capital gains levy remain due, despite the treaties.
A taxpayer settled abroad, a long-time expatriate or a foreign national, owns real estate in France, a Paris apartment, a property on the coast, or shares in a civil real estate company (société civile immobilière) that owns those assets. They often believe that, no longer being a French tax resident, they escape French wealth taxation. This is a mistake. Real estate located in France remains taxable in France, both for the real estate wealth tax and for capital gains on disposal, whatever the owner's residence and whatever the holding structure adopted. The corporate form is no screen, and tax treaties, far from systematically neutralising these taxes, most often confirm their application.
The subject is highly topical, fed by abundant litigation pitting non-residents of all nationalities against the French authorities, on the ground of the real estate wealth tax as well as that of the levy applicable to capital gains. The central question is twofold: to what extent does holding French real estate, directly or through a company, expose a non-resident to these taxes, and can bilateral tax treaties stand in the way?
We first examine the non-resident's liability to the real estate wealth tax (I), then the levy on real estate capital gains under article 244 bis A and its extension to shares in real-estate-rich companies (II), before drawing the practical consequences and our structuring recommendations (III).
I. The non-resident's real estate wealth tax
A. A basis that ignores the form of holding
The real estate wealth tax (impôt sur la fortune immobilière, IFI) applies to individuals not resident in France in respect of their real estate assets and rights located in France alone, where the net taxable value of that estate reaches the liability threshold. Beyond the direct holding of property, article 965 of the French General Tax Code (CGI) includes in the basis the shares or interests of companies, up to the fraction of their value representing real estate assets or rights held directly or indirectly in France. The text is explicit: the corporate form, the tax regime and the place of establishment of the company are irrelevant. A French civil real estate company, a foreign company holding French real estate, a chain of interposed participations, all fall within the scope of the IFI in proportion to their French real estate component.
The company is no screen. This rule deprives of effect, on the ground of the IFI, the idea that interposing a civil company or a foreign structure would shelter French real estate from the tax. The non-resident who holds shares in a civil real estate company owning a property in France is liable to the IFI on the fraction of their shares representing that property, exactly as if they held it directly. Only the French real estate fraction is retained, excluding financial assets or assets located outside France, but that fraction is indeed taxable. Wealth structuring through a company, frequently put forward, therefore produces no exemption effect for the IFI.
B. The treaties' reference to domestic law and its controversies
The treaties concluded by France in matters of wealth generally allocate to the State where the assets are located the right to tax wealth made up of real estate, and refer to the domestic law of that State for the meaning of terms they do not define. Yet French domestic law counts among taxable assets company shares up to their real estate fraction. The Cour de cassation drew the consequences in a judgment of 6 May 2026 (Com., no. 24-22.185, reported): the notion of a legal person whose assets consist principally, directly or through one or more other companies, of real estate located in France, as used in article 22(2) of the France-Russia treaty of 22 November 1996, must be given the meaning conferred on it by article 750 ter, 2°, of the CGI and, by reference from that provision, article 990 D. The solution rests on the referral clause of article 3(2) of the treaty, common to most treaties. Two reservations are nevertheless called for: the judgment was delivered in matters of the former wealth tax (ISF), for the years 2015 and 2016, and the official guidance recalls that a treaty applicable to that tax is not necessarily applicable to the real estate wealth tax, a case-by-case examination of the treaty provisions remaining necessary (BOI-PAT-IFI-10, § 30).
A debated solution. This analysis is not free of criticism, and we share the reservations expressed about it. French law does not, in principle, assimilate shares in real-estate-rich companies to real estate: civil law characterises them as movable property, and only express provisions, such as article 750 ter, 2°, apply to them the regime of real estate for tax purposes. The reference made by certain treaties to the domestic notion of real estate should not, in sound logic, suffice to bring within the treaty scope company shares that civil law characterises as movable property. The wording of each treaty is decisive here, some expressly distinguishing the treaties that apply to shares in real estate companies the regime of real estate from those that treat them as movable property. The analysis must therefore be conducted treaty by treaty, without hasty generalisation.
II. Real estate capital gains and the article 244 bis A levy
A. A levy extended to shares in real-estate-rich companies
The disposal of French real estate by a non-resident gives rise to the specific levy of article 244 bis A of the CGI, which strikes real estate capital gains realised by individuals not resident in France and by legal persons whose seat is located outside France. This levy is not limited to the disposal of property: it also applies to the disposal of shares in real-estate-rich companies, that is, companies whose assets are mainly composed of real estate located in France. The text thus assimilates, for the purposes of the levy, the disposal of these shares to that of a real estate asset, which closes off the route of an indirect disposal that would escape French tax.
The role of treaties. As with the IFI, this levy applies subject to tax treaties, but these most often confirm the right to tax of the State where the assets are located. The reasoning is the one adopted in matters of wealth: where the applicable treaty refers to domestic law for the meaning of terms it does not define, and where that domestic law assimilates shares in real-estate-rich companies to real estate, the gain realised by a company established abroad on the disposal of those shares remains taxable in France. Everything therefore turns on the wording of the treaty at issue, which must be examined provision by provision. The non-resident who disposes of shares in a French real estate company cannot therefore, as a rule, rely on their foreign residence to escape the levy.
B. Basis, rates and disposal price
The levy is assessed on the capital gain determined under the applicable rules, with rates that vary according to the status of the transferor, the rate applicable to individuals differing from that applicable to legal persons subject to corporate income tax. A particular treatment is reserved for transferor legal persons resident in the European Union or the European Economic Area that have concluded with France a convention on administrative assistance, both as to the rate and as to the possibility of refunding any excess of the levy over the tax actually due. As to the tax representative, article 983 of the CGI provides that persons holding assets referred to in article 965 located in France without being resident there for tax purposes may be invited by the tax office to appoint one, and above all that this obligation does not apply to persons resident for tax purposes in another Member State of the European Union or in a State party to the European Economic Area agreement that has concluded with France a convention on administrative assistance against tax fraud and evasion as well as a convention on mutual assistance in the recovery of tax. For a reader resident in the Union, the question therefore does not arise. An accredited representative may on the other hand be required for the article 244 bis A levy, under the conditions specific to that regime.
The price actually agreed, not the market value. The Conseil d'État settled this point on 24 February 2026, in taxpayers' favour (CE, 9th and 10th chambers combined, no. 496482, SARF Azur). For the application of articles 244 bis A and 164 B of the CGI, the disposal price of real estate assets or of rights over such assets is the price actually agreed between the parties; where the sale is recorded in a notarised deed, that price is the one stated in the deed, unless one of the parties to the deed enters a challenge for forgery against the stated price or the authorities prove a concealment of the stipulated price as against the real price of the sale. The authorities may not therefore set aside the price stated in the deed and substitute an amount representing the market value of the asset without it even being alleged that the stipulated price was lower than the price actually agreed. This rule protects the transferor against a discretionary revaluation of the basis, and places on the authorities the burden of proving concealment.
III. Practical consequences and structuring
A. The SCI does not protect, but remains a management tool
The first lesson, for the non-resident, is that interposing a civil real estate company offers no protection against the IFI or against the levy on capital gains. The company is transparent, for these taxes, up to its French real estate component. This does not mean that the civil real estate company is without interest: it remains a valuable tool for management and transmission, facilitating joint holding, the organisation of family governance and the gradual transmission of shares. But its usefulness must be appraised for what it is, a civil and succession instrument, and not as a means of escaping French real estate taxation, which it is not.
Distributions by the civil company. Where a French civil real estate company that is not subject to corporate income tax realises profits, these are taxable in France at the place where the property is located, the tax being borne by the partners in proportion to their rights. Sums distributed by such a company to non-resident partners do not, in principle, bear withholding tax in France and may be taxed in the partners' State of residence, which leads the authorities to conclude that there is no juridical double taxation. This articulation must be verified case by case, depending on the applicable treaty and the tax regime of the company.
B. Practical recommendations: analyse, declare, anticipate the disposal
Map the IFI exposure treaty by treaty. The non-resident holding French real estate, directly or through a company, must have their IFI exposure assessed taking into account both domestic law and the treaty applicable to their State of residence. Because the wording of treaties varies significantly, and because the question of assimilating shares in real estate companies to real estate remains debated, a fine analysis of the relevant treaty is indispensable, some provisions being capable of offering defence arguments that others exclude.
Anticipate the taxation of the disposal. Before any disposal of a property or of shares in a real-estate-rich company, one should assess the article 244 bis A levy, its rate, any obligation to appoint a tax representative and the possibilities of refund according to the status and residence of the transferor. The structuring of the holding, upstream, directly affects the exit cost, and a decision taken without this analysis can prove costly. Since the disposal price must correspond to the price actually agreed, the documentation of the transaction must be carefully prepared to prevent any challenge.
Comply with the filing obligations. The non-resident's liability to the IFI comes with its own filing obligations, compliance with which conditions the security of the situation. The appointment of a tax representative, where required, and the keeping of rigorous documentation of the value of the assets and shares are essential precautions. We assist non-residents in analysing their exposure, securing their returns and preparing their real estate disposals.
Conclusion
Real estate located in France remains taxable in France in the hands of the non-resident, for the real estate wealth tax as for capital gains on disposal, without the interposition of a civil or foreign company acting as a screen. Tax treaties, which most often refer to the domestic notion of real estate, generally confirm this right to tax, even if the assimilation of shares in real estate companies to real estate is open to debate and warrants, in certain treaty configurations, careful examination.
Our conviction is that French real estate taxation of the non-resident is not circumvented by the form of holding alone, but managed through a precise analysis, treaty by treaty, of the exposure to the IFI and to the levy on capital gains. The civil real estate company retains its full relevance as a tool for management and transmission, provided it is not credited with an exemption virtue it does not have.
Our recommendation is clear: if you hold French real estate as a non-resident, have your IFI exposure analysed under the applicable treaty, anticipate the taxation of any future disposal, and secure your filing obligations. An accurate reading of domestic and treaty law is the only effective protection against reassessments.
Frequently asked questions
Does a non-resident pay the wealth tax on real estate located in France?
Yes. The real estate wealth tax applies to persons not resident in France in respect of their real estate assets and rights located in France alone, where the net taxable value of that estate exceeds the threshold set by article 964 of the CGI, namely 1,300,000 euros, assessed as of 1 January of the tax year. This holds for the direct holding of a property as well as for the holding of shares in a company, French or foreign, up to the fraction of their value representing French real estate (CGI, art. 965). The corporate form, the tax regime and the place of establishment of the company are irrelevant.
Does holding my property through an SCI let me escape the wealth tax?
No. Interposing a civil real estate company offers no protection against the IFI. The non-resident is liable to the tax on the fraction of their shares representing the French property, exactly as if they held it directly. The civil real estate company remains a useful tool for management and transmission, but it is not a means of exemption from French real estate taxation. Only the French real estate fraction is retained, excluding the company's other assets.
How is the capital gain taxed when a non-resident sells a French property?
The disposal gives rise to the levy of article 244 bis A of the CGI, which strikes the real estate capital gains of non-residents, individuals and legal persons alike. It also applies to the disposal of shares in real-estate-rich companies, assimilated to real estate. The rates vary according to the status of the transferor, and a particular rate-and-refund regime benefits transferors established in the European Union. The levy applies subject to treaties, which most often confirm France's right to tax.
Can a tax treaty prevent taxation in France?
Rarely in real estate matters. Treaties generally allocate to the State where the assets are located the right to tax wealth and real estate capital gains, and refer to domestic law for the definition of real estate, which includes shares in real-estate-rich companies. The assimilation of these shares to real estate is, however, debated, and the wording of each treaty is decisive. A treaty-by-treaty analysis is indispensable, some offering defence arguments that others exclude.