As the 2026 filing season approaches, taxpayers subject to France’s Impôt sur la Fortune Immobilière (IFI) still have a window of opportunity to optimize their position. The threshold remains at €1.3 million in net taxable real estate assets as of January 1, 2026. The rate schedule, unchanged since the creation of the IFI in 2018, applies from the €800,000 mark upward on a progressive scale ranging from 0.50% to 1.50% above €10 million. For a real estate portfolio valued at €2.5 million, the resulting tax bill amounts to approximately €11,400. Here are four levers worth considering.

Property dismemberment: a powerful structural lever

Dismemberment remains one of the most effective strategies for IFI purposes. The principle is straightforward: when a property is dismembered, the usufructuary — not the bare owner — must include it in their taxable base (Article 968 of the French Tax Code). By acquiring SCPI shares or real estate in bare ownership, the investor is exempt from IFI on those assets for the entire dismemberment period, typically between 10 and 20 years.

This strategy offers a dual advantage: it allows the investor to build a real estate portfolio at a discounted price (typically 60–65% of full ownership value for a 15-year dismemberment) while reducing the IFI base. Full ownership is automatically reconstituted at the end of the period, without additional costs or formalities. For portfolios exceeding €2 million, cumulative savings can amount to tens of thousands of euros over the dismemberment period.

Portfolio rebalancing: shifting toward financial assets

The IFI only taxes real estate wealth. Consequently, any reallocation from real estate to financial investments mechanically reduces the taxable base. This rebalancing strategy can take several forms: selling a rental property to reinvest in a Luxembourg life insurance policy, subscribing to private equity funds, or diversifying into equity and bond UCITS.

The key is to execute this reallocation consistently with the overall strategic asset allocation. The objective is not to sell a performing asset solely for tax reasons, but to integrate the IFI dimension into a comprehensive wealth management framework. For a taxpayer with €3 million in real estate, reducing this base by €500,000 through well-calibrated rebalancing generates annual IFI savings of approximately €3,500 to €5,000.

Charitable donations: a direct and immediate reduction

Charitable giving is the only mechanism that provides a direct reduction of the IFI itself. Donations to eligible public interest organizations qualify for a 75% reduction, capped at €50,000 per household per year (Article 978 of the French Tax Code). A €20,000 donation thus eliminates €15,000 in IFI liability.

Eligible organizations include foundations recognized as serving the public interest, higher education and research institutions, and certain associations. This mechanism is particularly relevant for taxpayers in the upper brackets, for whom the tax burden can become significant. It also allows wealth optimization to be combined with philanthropic commitment, a dimension increasingly valued by high-net-worth individuals.

Deductible liabilities: optimizing debt management

Outstanding mortgage principal as of January 1 of the tax year is deductible from the IFI taxable base, subject to the conditions set forth in Article 974 of the French Tax Code. However, the 2018 Finance Act introduced a cap: deductible debt is limited when asset values exceed €5 million, with a progressive reduction mechanism.

For portfolios in the accumulation or restructuring phase, using borrowing to finance real estate acquisitions reduces the net taxable base. The analysis must, however, factor in borrowing costs, expected asset appreciation, and the gradual amortization of the debt, which reduces the tax benefit each year. A multi-year projection is recommended to measure the net effect of this strategy.

The 2026 IFI declaration is filed alongside the income tax return using form n° 2042-IFI. The electronic filing deadline varies by department but generally falls between late May and mid-June. Now is therefore the time to analyze your situation and activate the appropriate levers, in consultation with your wealth management advisor.

The information contained in this article is provided for informational purposes only and does not constitute personalized investment advice. All investments carry risk. It is recommended to consult a certified wealth management advisor before making any decision. Riviera Wealth Management is registered with ORIAS as a Financial Investment Advisor (CIF), a member of an AMF-approved association, in accordance with MiFID II directive provisions.