Estate
French inheritance tax and property: a guide for foreign heirs
If you have inherited — or expect to inherit — French property, you will encounter the French inheritance tax system regardless of where you live. French law asserts taxing rights over French-situated assets, even when both the deceased and the heirs are non-residents. The property's declared value is the foundation of the tax calculation. Getting that value wrong — in either direction — has consequences. This guide explains what you need to know.
Does French inheritance tax apply to non-residents?
Yes. France taxes the transfer of French-situated real estate under the droits de mutation à titre gratuit (DMTG) — commonly called droits de succession or inheritance tax. The liability applies regardless of the residency of the deceased or the heirs, unless a bilateral tax treaty provides otherwise.
France has inheritance tax treaties with a number of countries (including the US and several EU states), but not with the Gulf states, the UK, or Switzerland.
Independent data: inheritance tax rates in France run from 5% to 45% for direct heirs (children, spouses), rising steeply for non-direct heirs and unrelated beneficiaries. The applicable rate depends on the degree of kinship and the net taxable value of the share received.
How is the taxable value determined?
The taxable value is the open market value (valeur vénale) of the property at the date of death. The heirs — or their notary — declare this value in the estate declaration (déclaration de succession) submitted to the French tax authority within six months of death for deaths in France, or twelve months for deaths abroad.
The French tax authority (DGFiP) can challenge the declared value for up to three years (délai de reprise) if it believes the value has been underestimated. A reassessment triggers additional tax, interest at 0.20% per month, and a 40% penalty if the undervaluation exceeds a certain threshold.
Why an independent valuation protects you
- A defensible figure for the tax declaration
- A clear methodology that can be explained to the tax authority if challenged
- A basis for agreement between heirs when the estate includes real property
- Legal admissibility if the matter goes to litigation
What to do if you are an international heir
- Identify the notary handling the French estate — French law requires a notary to oversee the succession.
- Commission an independent valuation at the date of death, not at the current date.
- Provide the valuation report to your notary for inclusion in the estate declaration.
- Keep copies of all documents — the tax authority's délai de reprise runs for three years from the filing date.