France’s new Real Estate Wealth Tax (IFI): the deduction for charitable donations has been maintained
The new IFI tax makes it possible to continue combining generosity and tax optimization. Taxpayers who are subject to the IFI tax will be able to take a deduction equal to 75% of their charitable contributions.
Provisions in France’s new IFI- Real Estate Wealth Tax, (replacing the old ISF Solidarity Wealth Tax) make it possible to continue to combine generosity, social impact, and tax optimization. In the new tax scheme, taxpayers who are subject to the IFI tax, will be able to take a deduction equal to 75% of their annual charitable contributions up to €50,000, as was the case for the old ISF tax.
For information: the tax base for the old ISF Wealth Tax included portfolio investments, savings, and other assets, as well as real estate holdings. The tax base for the new IFI Real Estate Wealth Tax is exclusively limited to real estate holdings. The IFI tax will be calculated the same ay the ISF tax was. Only taxpayers whose real estate holdings are worth over €1.3 million as of January 1st 2018 will be subject to the IFI tax.
By choosing to give to Fondation Paris-Dauphine, you benefit from a tax deduction, but most of all you are investing in a major French socioeconomic driver, one with an international outlook that focuses on innovation and social responsibility. Your gift will be used to finance concrete projects whose goal it is to transform society through higher education.
To calculate the tax deduction attached to your donation, you multiply your donation by 0.75. So, if you would like to know how much you would need to give so that your deduction would be equal to your IFI tax, therefore reducing your IFI tax to zero, you just multiply the amount of your IFI tax by 1,33 (1/75%). For example, if your IFI tax before deduction is €1,500, then you you could reduce the IFI tax due to zero by making a donation of €2,000 to Fondation Paris-Dauphine. €2,000 represents one international exchange grant that makes it possible for a Dauphine student to study abroad for one year.
Charitable contributions that are eligible for the 2018 IFI deduction are those made after the 2017 ISF declaration cutoff date and before the 2018 IFI cutoff date (to be announced).