French 2026 Finance Act: Tax Measures for Non-Residents on Inheritance, Capital Gains, and Wealth

PARIS - Nov. 26, 2025 - PRLog -- France's draft 2026 Finance Act proposes significant changes that could impact non-residents holding assets in France, particularly concerning inheritance tax, capital gains tax, and the wealth tax system. If approved, these reforms will broaden the tax bases and introduce new levies, potentially increasing the fiscal burden for foreign asset holders in France.

Inheritance Tax Changes
The Finance Act raises the tax allowance for stepchildren to €15,932, reducing the inheritance tax burden for blended families, including non-residents. Inheritance tax remains due on French assets inherited by non-residents, and obligations for tax filing and payments persist. The law continues to apply forced heirship rules, with certain allowances benefiting disabled heirs and close relatives. Non-residents are taxed on French assets inherited regardless of their domicile status, emphasizing the territorial nature of French inheritance tax obligations.​

Capital Gains Tax Adjustments
Non-residents selling French real estate remain subject to a 36.2% combined CGT rate, consisting of 19% income tax and 17.2% social charges. The 2026 Finance Act maintains this regime but highlights exemptions based on the duration of ownership—full exemption from income tax after 22 years and from social charges after 30 years. A key compliance measure is the requirement for non-EU residents to appoint a French fiscal representative if the taxable gain exceeds €150,000, ensuring proper declaration and payment of tax. These rules imply ongoing vigilance for non-resident sellers regarding filing and potential new administrative requirements.​

Wealth Tax and New Levies
A noteworthy introduction in the 2026 Finance Act is a new 2% tax on non-operational assets held by private holding companies, applicable to both French and foreign entities meeting certain criteria. This tax targets the financial assets of holding companies and excludes real estate assets already subject to the French real estate wealth tax (IFI). Moreover, the Wealth Tax (IFI) itself is being extended to include luxury goods, non-productive real estate, digital assets, and life insurance funds, expanding the base for high-net-worth individuals. Non-residents owning French property or participating in French companies remain liable for IFI only on these French-linked assets, with the threshold starting at €1.3 million in net taxable property assets.​

In summary, non-residents with French holdings should closely monitor these evolving measures, as the draft 2026 Finance Act intensifies tax coverage on inheritance, capital gains, and wealth, with additional obligations for companies and individuals holding assets in France. Effective tax planning will become increasingly essential to navigate these expanded fiscal responsibilities.

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