Who Pays Wealth Tax in France?
Tuesday 08 August 2017
Over 300,000 households in France are liable for the French wealth tax and public tax records tell us a fair bit about where the rich live.In 2015 some 343,000 households in France were liable for the French wealth tax, called Impôt de solidarité sur la fortune (ISF).
Collectively they paid €5.2 billion in ISF, an average of around €15K per household.
Those who pay the tax are households with net taxable assets greater than €1.3m, whose assets greater than €800K are then taxable.
In the calculation of liability there are a range of reliefs and exemptions - a 30% abatement on the value of the principal home, loans and mortgages and certain other costs are deductible, revenue income is not included, and business assets are not taken into account. Funds deposited in an assurance vie are also excluded.
Non-residents with second homes are also liable, but only on their assets in France.
President Macron is proposing that only real estate is used in the equation for determining liability and we will report further on these proposals when they are published.
If your net wealth is less than €2.57m then the ISF tax declaration is submitted with your annual income tax declaration.
Above this level a separate tax declaration is necessary, and those declarations submitted last year tell us something about the geographic distribution of taxpayers and how much they paid.
As the capital city, Paris has the highest count of those who made a separate ISF tax declaration, some 63,000 households, although that is less than 5% of all taxable households in the city.
Three arrondissements of the city took the top spot in the number of households liable for the tax; the 16ème had the greatest concentration liable (14,369), followed by the 15ème (6,768) and 17ème (6,189).
However, the richest district in the city is the 7ème, where 5,727 households paid an average of €27,128 in ISF. They were followed by households in the 8ème, where the average ISF bill for 3,129 households was €21,691.
The top twenty communes in France in terms of total number of households liable includes 11 districts of Paris.
As a proportion of the total population it is the commune of Neuilly-sur-Seine, to the west of the capital city, in the department of Hauts-de-Seine, that might better be characterised as the most wealthy place in France. Here, 5,859 households submitted a separate ISF declaration, equivalent to 17% of the taxable households. The average wealth of these households is €5.3 million, paying an average of €21,000 in wealth tax.
Indeed, the department of Hauts-de-Seine contains five communes in the list of the top thirty wealthiest places in France. In addition to Neuilly-sur-Seine are Boulogne-Billancourt, Rueil Malmaison, Saint Cloud, and Levallois-Perret.
It is closely followed by the department of Yvelines in the Ile-de-France region around Paris, which counts six communes in the top thirty - Versailles, Saint-Germain-en-Laye, La Celle-Saint-Cloud, Maisons-Laffitte, Le Chesnay and Chatou.
Beyond Paris and the Ile-de-France, the table below shows the number of households in other major towns and cities with separate ISF liability in 2015 and the average amount they each paid in wealth tax.
|Town||No Liable||Average ISF Tax Paid|
|Lyon ||4,472||€10,622 |
|Marseille ||3,821||€10,289 |
|Toulouse ||2,727||€9,492 |
|Cannes ||2,424 ||€7,821 |
| Nantes ||2,084||€9,709 |
|Aix-en-Provence ||1,872||€10,692 |
|Strasbourg ||1,786||€13,174 |
This article was featured in our Newsletter dated 08/08/2017