Tax policy directorate – Bureau a

 
CHAPTER 3: 
WEALTH TAX 
Wealth tax (impôt de solidarité sur la fortune, ISF) is an annual tax payable by individuals on account of 
their ownership of personal assets, the net value of which, assessed on 1 January of the year of 
taxation, exceeds a certain amount.
The wealth tax yielded €5.22 billion in 2015.
I – LIABLE PERSONS 
Individuals liable to the wealth tax are those whose net taxable wealth exceeds €1.3 million as at 
1 January of the year of taxation. 
Persons domiciled in France are taxable on their assets in and outside France (taxation on "worldwide 
assets").
Persons not domiciled in France within the meaning of French domestic law are taxable only on their 
assets in France, with the exception of their financial investments. 
Persons who transfer their domicile to France are taxable, for the five years following their 
establishment in France, only on their assets in France, where they have not been domiciled in France 
for tax purposes during the five years prior to the transfer of their domicile. 
The tax is assessed by household, which comprises spouses, cohabiting partners, partners of a PACS 
and minor children whose assets either of them legally administers.
II – TAX BASE 
The tax base includes all assets, rights and values belonging to the taxable persons on 1 January of the 
year of taxation (developed and undeveloped land, real property rights such as usufruct or easements, 
sole proprietorships, farms, furniture, deposit accounts, cash, financial investments, cars, aircraft, 
pleasure craft, etc.).
As a rule, taxable assets are valued according to the rules applicable to inheritance tax (in principle at 
market value). The value is assessed at 1 January of the year of taxation. 30% relief is applied to the 
real market value of the property which the taxpayer owns and occupies as his or her main home. 
Under certain conditions, some debts may be deducted from this tax base, or be subject to a specific 
charge. To be deductible, debts must exist on 1 January of the year of taxation, must be the personal 
responsibility of the taxpayer, his/her spouse filing jointly (or concubine or civil partner) or their minor 
children whose assets they legally administer, and must be supported by all types of proof compatible 
with the written procedure. 
Debts incurred by a taxpayer in order to acquire or in the interest of assets not taken into account for 
the assessment of the wealth tax owed by the taxpayer in question, or assets which are exempt, shall 
be exclusively allocated to the value of these assets and are thus not deductible from the taxable base. 
Where necessary, these debts shall be allocated up to the fraction of the value of these non-exempt 
assets, i.e. in the same proportion as that in which the assets in question are liable to wealth tax. 
Moreover, some assets are fully or partly exempt. These assets primarily consist of professional assets 
(sole proprietorships effectively managed by the taxpayer; shares in partnerships liable to income tax 
when the taxpayer exercises his/her main professional activity within the partnership; participation 

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interests held in companies liable to corporation tax provided at least 25% of the company is held by the 
tax household, or even by the family group when the taxpayer holds a senior managerial position in the 
company), shares for which the taxpayer has undertaken to keep (under the so-called “Dutreil 
Scheme”), shares resulting from subscription of the capital of SMEs, investments in certain venture-
capital funds or social and solidarity-based enterprises, the capitalisation value of life annuities 
constituted as part of a professional activity, annuities or compensation received for bodily damage due 
to an accident or illness, literary and artistic copyrights held by the author, certain rural properties, 
antiques, artworks and collector's items. 
Financial investments of persons not domiciled in France for tax purposes are specifically exempt from 
wealth tax. However, the following are taxable: 
• 
Shares in an unlisted company or legal entity whose assets predominantly consist of real 
property or real property rights situated on French territory, in proportion to the value of such 
assets in relation to the company's total assets 
•