Created in 2018 to replace the solidarity tax on wealth (impôt de solidarité sur la fortune - ISF), IFI is the most dynamic tax, with revenues rising steadily at an average rate of +14.2% per year.
In 2022, a total of 164,000 households were affected by IFI, representing an increase of 23% in the number of taxpayers since 2018. The main reason for this is the entry threshold of €1.3 million, which has remained unchanged since the tax was introduced despite the rise in property prices. It represents a small €1.8bn share of the tax burden on household wealth, which is estimated at €117bn.
As a reminder, IFI applies to anyone who directly or indirectly owns property worth more than €1.3 million.
Read our full article: Understanding property wealth tax in France
This report puts forward 7 recommendations focusing on 3 points:
Better support for taxpayers:
- Assessing the value of the property: Although one of the key criteria for applying this tax is the value of the property, it is still difficult to assess. The Cour des Comptes recommends that taxpayers be given more support, for example by providing information on price trends in the immediate area, to avoid "under-valuation" of declared properties, or by authorising unlimited access to the "Patrim Usagers" service, which searches for property transactions to help estimate the value of a property.
- Payment of IFI: Allow taxpayers liable for IFI to opt - as with income tax - for payment by direct debit, which is tacitly renewable.
Simplify certain aspects of IFI management
- Administration costs: Administration of IFI represents a significant cost (2.66% of receipts in 2022) compared with that of income tax (1.05% in 2022). The report encourages the administration to identify and monitor these costs.
Strengthening controls and detecting fraud
- Although they remain infrequent, IFI audits have been on the increase since 2020. It would seem necessary to optimise their scheduling and detection tools by taking new criteria into account, particularly for property held via SCIs.
These are only recommendations from the Cour des Comptes to the tax authorities. We will monitor their possible future adoption.
Rosemont can help you prepare your tax returns and assist you with your tax affairs in France. For more information on IFI or our services, please contact consulting@rosemont.mc