10. Ownership Structures for Buying Property in France - Conclusion

In the previous pages we reviewed different propoerty ownership structures in France. What is to be concluded from our review?

Not an easy question when the circumstances of every household are going to be different, so the following remarks should only be used for general guidance.

It will be evident that most questions about the different forms of ownership turn on those relating to inheritance rights and inheritance taxes.

1. 10.1. Inheritance Taxes
2. 10.2. Inheritance Rights
3. 10.3. Summary

10.1. Inheritance Taxes in France and Ownership of French Property

Since the abolition in 2007 of inheritance tax between man and wife and those in a French civil partnership, the whole issue of inheritance tax in France is no longer a major issue for most international buyers.

In particular, if you grant tax free gifts during your lifetime, you can reduce the liability of your successors to inheritance tax on your death.

A French marriage contract between a couple or purchase en tontine means the whole of the property is transferred to the surviving spouse, so the potential tax liability of children is deferred.

However, if your children are later likely to be liable to inheritance tax, this choice will impact adversely on the level of the tax payable by them on death of the surviving spouse. You may well, therefore, need to make tax free gifts to your children during your lifetime to reduce the impact of this higher tax imposition.

You can also buy through an SCI and purchase the property using an ownership structure called démembrement croisé, which would reduce potential liability.

In all cases you need to determine whether your circumstances make inheritance tax an issue about which you need to be concerned.