What are the rules on gifting a property in France?

Reader Question: We split our time between France and Australia, but now want to leave France for good. We want to give our French property to one of our daughters who still lives in France for free (or as little as possible). Is it possible to just transfer her name to the sales deed?

You cannot simply change the name on the property deed to that of your daughter, however, France has a relatively generous tax allowance for gifts to children.

To officially change the name on a deed via a gift, the process must be overseen by a notaire.

You could also sell the house to your daughter, but you cannot sell it for a massively reduced amount, as this would be considered as tax fraud.

Otherwise, on your death, inheritance rules and taxes will apply.

Read more: Is an Australian will legally binding in France?

Gifting the property

You will need to consider France’s gift laws and tax, and this can be done via an acte notarié (official notarised deed) authorised by a notaire.

If you are a resident of Australia, you should also check if Australian tax may be payable. Australia has no specific gift tax, but giving a property may trigger capital gains tax. 

Under French rules, each child can receive a tax-free gift from each parent worth up to €100,000 every 15 years, with anything above this limit subject to tax.

This tax is usually payable by the recipient of the gift, but the giver can also pay it, and if they do this is not considered an additional taxable gift. 

Non-direct family members (grandchildren, siblings, cousins etc) and third-parties have much lower tax-free gift thresholds – see here for more information.

You will also have to pay notaire’s fees.

Read more: Consider the tax implications of making a gift in France

It is also possible to give away only a lifetime use of the property (usufruit), keeping the residual legal ownership (called nue-propriété) yourself, if you wish to do so. This reduces the value of the gift. 

You should also bear in mind that under French inheritance law, the gifting of the house should not unfairly impact other people set to inherit parts of your assets, including other children. We advise discussing this with a notaire, or other lawyer, with experience with international clients. 

Alternative options include gifting the house equally between your children, as each can benefit from the €100,000 tax-free gift amount, or setting up a société civile immobilière (SCI) for the property. 

Selling the property 

You can sell your property as opposed to gifting it, but this would require your daughter to pay what is essentially the market valuation of the property. 

Properties cannot be sold extremely cheaply to family members, as the tax authorities see this as an attempt to evade gift tax, and will intervene. 

Properties must be sold within a range according to comparable market prices of similar properties nearby. 

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