An American client asked us the question a few days after signing the deed of sale for an apartment in the 7th arrondissement: “And if something happens to me, what happens to the apartment?” The answer surprised him, as it surprises the majority of our foreign buyers. French inheritance law is fundamentally different from Anglo-Saxon law, and ignoring these rules can have major financial consequences for your heirs. At Home Select, we systematically recommend that our international clients consult a notaire specializing in international law before the purchase, not after.
Forced heirship: the principle that changes everything
The central concept of French inheritance law is forced heirship (reserve hereditaire). Unlike American or English law, which grant near-total testamentary freedom (freedom of testation), French law requires that a minimum share of the estate go to the deceased’s children.
The proportions are fixed: for one child, the forced share is half the estate. For two children, it rises to two-thirds. For three or more children, it reaches three-quarters. The remaining portion, the freely disposable share (quotite disponible), is the only part over which the testator can exercise their freedom.
For an Anglo-Saxon couple accustomed to drafting a will leaving everything to the surviving spouse, this rule comes as a shock. An American owning a one-million-euro apartment in Paris, with two children, can only bequeath 333,000 euros of that apartment to their spouse: two-thirds automatically go to the children. The surviving spouse is not even a forced heir under French law: their rights depend on the matrimonial regime and testamentary provisions.
EU Regulation 650/2012: an escape route
The European succession regulation, in force since 2015, offers a valuable option to foreign nationals. It allows anyone to choose the law of their nationality to govern their succession, instead of the law of their country of residence or the law of the location of the property. An American or British citizen can therefore insert a clause in their will (professio juris) opting for the law of their nationality, thus recovering full testamentary freedom.
The procedure is simple: a handwritten or notarial clause in the will stating “I choose the law of [country of nationality] to govern my entire succession.” But beware of nuances. If the chosen law is American law, it is the law of the US state of residence that applies (inheritance law varies from state to state). Louisiana, for example, has a forced heirship system similar to the French one. And if your country of nationality is not an EU member, the regulation still applies: it was designed to be universal.
This option does not exempt you from paying French inheritance tax on assets located in France. It only modifies the distribution among heirs, not the taxation.
Inheritance tax in France: the rates
French inheritance tax (droits de succession) is calculated on the net share received by each heir, after application of allowances. The rate schedule depends on the relationship with the deceased.
Direct line (parent-child)
The allowance is 100,000 euros per child. Beyond that, the progressive scale runs from 5% (on the bracket up to 8,072 euros) to 45% (above 1,805,677 euros). In practice, a child inheriting a Parisian apartment with a net value of 500,000 euros will pay approximately 78,000 euros in tax. For a one-million-euro property, the tax reaches approximately 195,000 euros. These amounts can surprise buyers from countries with no inheritance tax (such as Sweden, which abolished it in 2005) or with very high thresholds (such as the United States, where the federal estate tax threshold exceeds 12 million dollars).
Between spouses and civil union partners
The surviving spouse and PACS (civil union) partner have been fully exempt from inheritance tax in France since 2007. This is a significant advantage compared to many countries.
For non-residents
The principle is territorial: only assets located in France are subject to French inheritance tax, unless the heir has been resident in France for more than six years. If both the deceased and the heir are non-residents, only French assets are taxed. Systematically check the tax treaty between France and your country of residence: some treaties provide a tax credit to avoid double taxation on inheritances.
Discover how Home Select supports international buyers
Estate planning strategies: anticipate to protect
The SCI: transferring shares rather than a building
The SCI (Societe Civile Immobiliere) is the most commonly used estate planning tool by international families owning property in France. The principle: instead of holding the apartment directly, you create a French company that owns it. You hold shares in this company, and these shares can be progressively transferred to your children.
The tax advantage is twofold. Each parent can give 100,000 euros of shares per child every 15 years, completely free of tax. A couple with two children can thus transfer 400,000 euros of shares every 15 years with zero taxation. Additionally, a discount of 10 to 20% can apply to the value of SCI shares on the grounds of their low liquidity, an advantage recognized by the tax authorities under certain conditions.
The disadvantage: the SCI has operating costs (annual accounting, general meeting, tax filings) of approximately 1,000 to 2,000 euros per year, and a creation cost of 1,500 to 3,000 euros. For a property worth less than 500,000 euros, the cost-benefit ratio must be evaluated case by case.
Split ownership: a powerful technique
Split ownership (demembrement) consists of separating bare ownership (nue-propriete) from usufruct (right of use and income). In practical terms, you donate the bare ownership of your apartment to your children while retaining the usufruct, meaning the right to live there or collect the rental income. Upon the usufructuary’s death, full ownership is automatically reconstituted in the children’s hands, without additional inheritance tax.
The value of the bare ownership depends on the donor’s age at the time of donation: 60% of the total value at ages 51-60, 70% at 61-70, 80% at 71-80. The earlier the donation, the greater the tax saving. A 55-year-old owner who donates the bare ownership of a one-million-euro apartment transfers “only” 600,000 euros in the eyes of the tax authorities, and the 100,000 euro per child allowances apply to this reduced base.
Lifetime gifts
Outside of split ownership, simple gifts remain an effective tool. The 100,000 euro per child allowance renews every 15 years. A couple can therefore transfer 200,000 euros to each child every 15 years, in complete tax exemption. By planning over 30 years, a couple with two children can transfer 800,000 euros with zero taxation, equivalent to the value of a fine Parisian apartment.
The role of the notaire specializing in international law
The notaire is the indispensable professional for inheritance matters in France. For a foreign owner, choosing a notaire specializing in international private law is not a luxury: it is a necessity. This notaire will coordinate French rules with those of your country of nationality and residence, draft adapted testamentary clauses, and structure the property ownership according to your estate planning objectives.
Fees for a consultation on international wealth structuring range from 1,500 to 5,000 euros, a modest investment in view of the potential savings on inheritance tax. At Home Select, our network of partner notaires includes firms experienced with international cases, English-speaking and familiar with the specificities of multinational estates.
What we recommend before every purchase
Since the founding of Home Select in 2011, we have assisted more than 1,200 buyers, including a growing share of international purchasers: American families, British entrepreneurs, Gulf-based executives, Scandinavian investors. Our recommendation is constant: structure the ownership of your Parisian property before signing the preliminary sales agreement, not after. Modifying the ownership structure after purchase is expensive (transfer duties, capital gains) and sometimes resolves nothing.
The inheritance question is not a morbid subject: it is an act of responsible wealth management. An apartment in the 6th arrondissement purchased for 1.2 million euros today can generate 200,000 euros in inheritance tax if nothing is planned. With an SCI and two programmed donations, this amount can be reduced to zero. The difference is planning.
For further reading on non-resident property taxation in France and understanding how to structure your purchase in Paris as a foreigner, our detailed guides complement this inheritance overview.
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Frequently asked questions
Can a foreign property owner disinherit their children for real estate located in France?
No, unless they opt for the law of their nationality via EU Regulation 650/2012 and that law allows full testamentary freedom (such as American or English law). Without this option, French law imposes forced heirship (reserve hereditaire): children are entitled to a minimum share of the estate.
What are the inheritance tax rates in France for property passed to a child?
Each child benefits from a 100,000 euro allowance in direct line, then a progressive scale applies: 5% up to 8,072 euros, 10% from 8,072 to 12,109 euros, 15% from 12,109 to 15,932 euros, 20% from 15,932 to 552,324 euros, and up to 45% above 1,805,677 euros.
Is the SCI a good tool for preparing the inheritance of a Parisian property as a foreigner?
The SCI allows progressive transfer of company shares with a 100,000 euro allowance per child every 15 years, while retaining management control. It is an effective tool for estates above 500,000 euros, but has annual operating costs (1,000-2,000 euros).
Must a non-resident pay inheritance tax in France on a Parisian apartment?
Yes, real estate located in France is subject to French inheritance tax, regardless of the deceased's or the heirs' nationality or tax residence. A tax treaty between France and the country of residence may provide mechanisms to avoid double taxation.
