France IFI and life annuities: swapping rental property for guaranteed income
Written by Hans Goldstein, licensed insurance agent · CA 4273294Short answer: France’s wealth tax, the IFI, reaches only net real estate above €1.3 million on 1 January 2026, at 0.5% to 1.5% for the whole household. A life annuity with no surrender value is outside it. Selling a rental to buy one takes that value out of IFI, as any sale would, and turns rent into lifetime income that France taxes on only 30% to 70% of each payment; for a US citizen the treaty then grants a French credit equal to the French income tax on a US-source annuity.
Free guide: Moving abroad on a fixed income
Income rules and taxes by country: Norway, Switzerland, Sweden, Italy, Spain, Malta and more, plus how a lifetime annuity fits.
IFI in 2026: real estate only
France replaced its general wealth tax with the impôt sur la fortune immobilière (IFI). Per service-public.gouv.fr (verified March 6, 2026), you owe it when the net taxable value of your non-professional real estate exceeds €1.3 million on 1 January 2026. Once you are over the line, the scale starts at €800,000:
| Net taxable real estate | Rate |
|---|---|
| Up to €800,000 | 0% |
| €800,001 to €1,300,000 | 0.50% |
| €1,300,001 to €2,570,000 | 0.70% |
| €2,570,001 to €5,000,000 | 1% |
| €5,000,001 to €10,000,000 | 1.25% |
| Above €10,000,000 | 1.50% |
A reduction (décote) applies between €1.3 million and €1.4 million. The household is assessed together: married couples, PACS partners and cohabiting couples share one threshold. A French resident counts real estate worldwide, so the rental you still own in the US is in the base once you live in France.
Why a life annuity sits outside IFI
IFI only looks at real estate. Insurance contracts count only for the part invested in real estate units (CGI art. 972), and BOFiP guidance says a contract with no surrender value does not have to be declared for IFI, listing immediate life annuities in payment among the non-surrenderable contracts. A life-only SPIA from a US insurer has no cash value and holds no real estate units, so it is outside the IFI base.
To be straight about it: cash and securities are outside IFI too. Selling the rental is what removes it from IFI. The annuity’s job is what happens next: it replaces the rent with income that arrives every month for life, needs no tenants or repairs, and is taxed lightly in France.
Why I write about this. My mom is Norwegian, my dad is American, and they’re planning the move from the US to Norway. My mom is the sponsor (the host, or “reference person” in UDI’s words), so Norway’s income test falls on her income, not my dad’s. UDI told us in writing that money in an account does not count as income, and only lifelong income does. Their savings were not the problem; the paperwork wanted a monthly number in the host’s name. The rules in France are different, but the problem is the same one many retirees hit: the income test, not the net worth. I’m writing this to help others in the same boat as my parents. Read how we worked through the Norway income requirement.
In the same boat? Let’s run your numbers
See roughly what a lifetime annuity would cost to close your income gap, then get my personal read by email. I can help while you still live in the US.
Estimates use the September 9, 2026 ImmediateAnnuities.com payout survey (life only) and a 15% cushion. Illustrative, not a quote.
Example: a couple with €2.0 million of real estate
A retired American couple moving to France owns a home in France and a paid-off US rental, €2.0 million of net real estate together. Their IFI: 0.5% on €500,000 plus 0.7% on €700,000, about €7,400 a year, every year, plus French tax on the rent.
If they sell a rental worth €750,000 net, their real estate falls to €1.25 million, under the threshold, so IFI drops to zero. Suppose $500,000 of the proceeds buys a life-only annuity on the husband at 65: about $3,195 a month, or $38,340 a year, at the September 9, 2026 ImmediateAnnuities.com survey average ($639 per $100,000). Illustrative, not a quote. A joint and survivor annuity keeps paying the wife after his death and pays less per dollar, so ask for both quotes.
| Item | Keep the rental | Sell and buy a life annuity |
|---|---|---|
| IFI (example household) | about €7,400 a year | €0 (real estate under €1.3M) |
| Income | Rent, minus vacancies, repairs and management | Fixed monthly payment for life |
| French taxable share of the income | Net rent | 40% of each payment if payments start at 60 to 69 (30% from 70) |
| Work | Landlord from abroad | None |
One cost sits outside this table: selling the rental can trigger US capital gains tax and depreciation recapture, and the timing of the sale relative to your move can change which country taxes the gain. Get that answer from a cross-border tax adviser before you list the property.
How France taxes the annuity payments
Under article 158-6 of the French tax code, a life annuity bought for a lump sum (rente viagère à titre onéreux) is taxable only on a fixed share set by your age when payments start: 70% under 50, 50% at 50 to 59, 40% at 60 to 69 and 30% at 70 and over (BOFiP BOI-RSA-PENS-30-20).
The treaty credit for US citizens. Under Article 24(2)(b)(vi) of the US-France treaty in the 1994 English text, renumbered (b)(v) by the 2004 protocol, a French resident who is a US citizen gets a French credit for US-source annuities equal to the French income tax attributable to them (Article 24(2)(a)(i)). The condition is that you show you have complied with your US income tax obligations. In practice France counts the annuity to set the rate on your other income but does not collect income tax on it, and the US taxes it under the exclusion ratio.
Social charges. The credit covers income tax, not France’s social charges. Service-public lists purchased life annuities as subject to them, at 18.6% in 2026 on the same age-based share. Bought at 65, that is 40% x 18.6%, about 7.4% of each payment. Rent from a French property is also subject to social charges, on the full net rent, so the annuity usually compares well here too.
Who this fits
The people this helps most are American retirees with more real estate than they want to manage from abroad: a rental or two in the US, a home in France, and the IFI line in sight. Rent is good income until the tenant leaves, the roof needs work or the exchange rate turns. A life annuity bought with part of the sale proceeds gives you a paycheck that does not depend on any of that, and the visitor visa renewal each year becomes a matter of showing the same deposits again. If your real estate stays well under €1.3 million, IFI is not your issue and the decision is about income and simplicity alone.
Practical rules
- Buy the annuity while you still have a US address; a US agent can only sell to US residents of states where he is licensed.
- Choose life-only or joint and survivor with no surrender value, so the contract stays outside IFI and reads as income for the visitor visa.
- Since January 1, 2026, a US citizen with a foreign residence address cannot opt out of federal withholding even with a US bank account (Treas. Reg. 31.3405(e)-1). Withholding is a prepayment, not extra tax.
- A US annuity is not reported on FBAR or Form 8938 and is not a PFIC. France has its own reporting for foreign accounts and contracts, so ask your French adviser which forms apply to you.
The trade-offs, once: the annuity is irrevocable, level unless you buy a cost-of-living rider, paid in dollars against euro costs, and backed by the issuing insurer’s claims-paying ability, while a rental can rise in value and pass to your heirs. Many couples sell one property, not all of them, and keep the rest. The visa side is on the France long-stay visitor visa guide.
Married? Make the income outlive either of you. In France the main applicant shows the income and the spouse joins as a family member, so the annuity sits with the main applicant. If a single-life annuity is on one spouse and that spouse dies first, the payments stop, and the surviving spouse may have to show income of their own at the next renewal. A joint and survivor annuity, which keeps paying until the second death, or a separate annuity on each spouse closes that gap. Joint and survivor pays less per dollar than single life, so ask for both quotes and compare.
Experts we point readers to
- The Good Life France (Janine Marsh): living in France; how Americans apply for a French visa
We link to these because their guides are among the most useful we found. We receive nothing for listing them and are not affiliated. All experts by country.
Frequently asked questions
Free annuity gap analysis for France. Tell me your ages, your Social Security or pension, and whether you are single or a couple. I will show how far your income is from the France requirement and what a lifetime annuity would cost to fill the gap, in the sponsor’s or main applicant’s name where that matters.
Related reading
- Moving abroad on a fixed income: hub
- Moving to Norway: my parents' story
- France long-stay visitor visa income
- Wealth tax countries and annuities
- How European countries tax a US annuity
- Spain wealth tax and annuities
- Annuity withholding for US citizens abroad
Sources
- Service-Public.fr: calcul de l'IFI, threshold and scale (verified March 6, 2026)
- BOFiP: IFI and non-surrenderable insurance contracts
- BOFiP: rentes viageres a titre onereux, taxable fraction by age
- US-France income tax treaty (IRS text), Article 24(2)(a)(i) and (b)(vi)
- US-France treaty, 2004 protocol: Article 24(2)(b)(vi) renumbered (b)(v)
- Service-Public.fr: social charges on investment income (18.6% in 2026)
- Treas. Reg. 31.3405(e)-1 (withholding for payees with a foreign address)
- IRS: Comparison of Form 8938 and FBAR requirements
- ImmediateAnnuities.com: immediate annuity rates by age (survey of September 9, 2026)
Goldstein & Co. LLC dba Goldstein Insurance Services · Hans Goldstein, licensed insurance agent, CA lic. #4273294 · NPN 20602398 · 213-414-2808 · hans@hansgoldstein.com
Education, not tax, legal or immigration advice. Rules, thresholds and exchange rates change; confirm with the consulate or immigration authority and a local tax adviser before you act, and get answers in writing. Hans Goldstein is a licensed insurance agent (CA 4273294) and can only offer annuities to residents of states where he is licensed. Annuity payments are guaranteed by the issuing insurer’s claims-paying ability, not by any government. Payout figures are illustrations from a published survey, not quotes. Immediate annuities are generally irrevocable.