Can we gift French property to our daughter?

Reader Question: My husband and I own two properties in France. We live in one and our daughter and her family live in the other. Can we give the other property to her outright? She could not afford to buy it.

Yes, it is possible to gift property, and in doing so the recipient, if they are your daughter or son, can benefit from a tax allowance of €100,000, so, say, the house was worth €200,000, only half of the value would be taxable.

All transfers of property have to be done via a notaire, who would help with the process.

The house would have to be realistically valued. 

Government tools can indicate what similar kinds of property have sold for in recent years. One is Patrim, available via your online account at impots.gouv.fr. The other is the property data map. You can also see estate agents’ adverts or ask one to provide an evaluation of your home. 

Notaires can also do this, at a fee.

Read more: Six ways to reduce your French inheritance tax

Over the allowance, gift tax is payable at rates including 5% up to €8,072, 10% up to €12,109, €15% to 15,932, 20% to €552,324. In our example, this makes for €18,194 in tax payable.

Normally, your daughter should make this payment by a transfer into the notaire’s account. If she cannot pay it, you could also take on board the cost, and this would not be considered another taxable gift.

There is also the option of gifting her only the usufruit – legal lifetime use of the property – which would have a reduced value (therefore reduced tax). You could leave her the remaining rights in your will and if you die 15 years or more after the gift, her allowance of €100,000 would apply again.

Read more: What are the rules on gifting a property in France?

The above only concerns the tax elements, so if you or your husband have other children, you should seek legal advice about inheritance law aspects of this.