France–Germany — The Riviera Private Wealth Brief

0Executive summary

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

1The France–Germany conventions — 1959 and 2006

The relationship rests on two instruments drawn from opposite ends of France's treaty practice. The convention of 21 July 1959, in force since 1961, is among the oldest France applies; it has been amended by the avenants of 9 June 1969, 28 September 1989, 20 December 2001 and 31 March 2015, and it carries, in its consolidated presentation, the multilateral instrument — in force for France since 1 January 2019 and for Germany since 1 April 2021 — including the principal-purpose test, under which a treaty advantage can be refused where obtaining it was a principal object of an arrangement. Unusually, the 1959 text covers taxes on wealth as well as on income: the French wealth tax is listed by name, and the convention extends to analogous taxes instituted after signature (article 1 §4), the footing on which the IFI, successor to the ISF from 2018, is examined. The succession and gift convention of 12 October 2006, in force since 3 April 2009, completes the frame from the other end: it is one of the few succession treaties France has concluded, one of the newest, and — a distinction developed in section I bis — one that governs lifetime gifts as well as estates.

Residence does the sorting, on both instruments. A person within the tax of both states is assigned by the tie-breakers of article 2 §4 of the 1959 convention, rewritten in 2015 on the OECD cascade: permanent home, then centre of vital interests, then habitual abode, then nationality, then mutual agreement. The 2006 convention runs its own domicile article to the same design, and adds the five-of-seven-years clause of article 4 §3 noted in the executive summary — a provision of direct interest to families in their first French years. The authentic texts of both conventions are French and German; this brief quotes the French consolidation.

The German side keeps its own accents. Germany has suspended its Vermögensteuer since 1997, taxes inheritances and gifts in the hands of transferor and acquirer by reference to residence, and organises family holdings through instruments of its own, the Familienstiftung above all. This brief states German law at orientation level only; its verified ground is the French side and the two conventions, and the German reading belongs with the family's German advisers.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 1959 convention (CML consolidation) arts. 1, 2 §4, 19 §6; 2006 convention arts. 2, 4; BOI-INT-CVB-DEU-10 (2012–2014 vintage — the text prevails)

2The market seen from Germany

Seen from Germany, the Riviera's €3M+ villa market leads with Cannes. Cannes and its hills — the Super Cannes quarter on the Vallauris side included — contributed 306 qualified sales for €2,066M across 2014–2025, at a €4.9M median and a €46.5M ceiling, with 37% of value in eight-figure transactions. The Saint-Tropez peninsula remains the largest €3M+ register on the coast, at 1006 sales for €7,049M, while Saint-Jean-Cap-Ferrat is its narrowest and most expensive: 178 sales for €2,375M at a €6.5M median and a €200.0M ceiling. The past 36 months alone account for €3,970M across the three.

Source: DVF (« Demandes de Valeurs Foncières », DGFiP), villa sales ≥ €3M, 2014–2025, estate-deduplicated — the same convention as the published Riviera Intelligence hub, so this brief and the public pages cannot disagree. DVF through 2025-12-31.

Ownership, in aggregate

The public record itself describes how the Riviera is held. This brief reads it in aggregate — the State's transaction register alongside the public company registers, all of it already published, anonymised in processing, and with no individual holding ever identified. Across 20 Riviera communes, 29% of the ownership positions studied are held from outside France, and Germany accounts for 10% of those foreign-held positions, concentrated on Cannes and its hills — the Super Cannes quarter on the Vallauris side included — and on the Saint-Tropez peninsula. One structural fact stands out: 90% of German-resident positions in the current study are held in direct personal ownership, without a company in the chain. Whether that directness is habit or judgement, the 2006 succession convention rewards it: section I bis examines why a wrapper earns a German family little at death.

Aggregates only, drawn from public sources under their re-use conditions; no individual holding is identified or published. Residence attribution follows the address of record. Figures refresh with each edition.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · DVF register, estate-deduplicated · ownership aggregates from public registers only

IBuying in France as a German resident

The process and its costs

The acquisition follows the standard French sequence: offer, compromis de vente with a ten-day cooling-off period, deposit of customarily 10%, conditions precedent, and the authentic deed before the notaire, who collects the duties and registers title. The notaire acts as a public officer rather than as the buyer's counsel, and German buyers typically retain their own advisers in addition. Because the 2006 convention settles succession and gift questions largely by reference to what the deed creates, the structure questions of section I bis deserve to be answered before the compromis is signed; the acquiring vehicle is difficult to change once the process is under way.

The cost of owning

CGI article 964 institutes the annual tax on real-estate wealth above €1,300,000 of taxable assets. For persons not domiciled in France the base comprises French-situs property together with the fraction of any company's shares representing French property (article 964-2°), and here the treaty position is settled rather than absent: article 19 §1 of the 1959 convention assigns French-situs property wealth to France, so a German-resident owner bears the IFI with the treaty's confirmation rather than its shelter. The exposure remains one-sided in practice, Germany having levied no wealth tax since 1997, so the IFI is a French cost of carry rather than a double charge.

For the family weighing a full move to France, the convention improves on the domestic statute. French law taxes any new resident arriving after five years abroad on French assets only for five years (article 964-1°, al. 2); article 19 §6 of the convention grants German nationals without French nationality the same five-year exclusion of non-French assets as a treaty right — one France cannot narrow unilaterally — and renews it where the person, having ceased to be a French resident for at least three years, later returns. The calendar of a move, and of any return, is therefore worth planning against both texts.

Recurring charges follow the property. Taxe foncière runs at communal rates; for furnished secondary residences, communes in the zone tendue — a category that includes the marquee Riviera communes — may vote a surtaxe on the taxe d'habitation for second homes, and the annual occupancy declaration is required of all owners. Because these rates are communal and year-specific, this brief's edition cycle re-verifies them rather than freezing them.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 964–965; 1959 convention arts. 19 §1, 19 §6; cost scales stated for orientation, itemised at engagement

I bisStructures, as questions

The structure question

Holding structures are presented here, in keeping with this line's doctrine, as questions for analysis rather than as recommendations. For a German buyer the analysis carries one organising fact: the 2006 convention was drafted with interposed companies in view, and it reads through them.

Debt against the IFI — what the code anticipates

The financing conversation runs as it does elsewhere on this coast: a loan from the buyer's bank, secured on a pledged portfolio, so that liquidity remains invested while the debt reduces the taxable base. The mechanics are lawful and the code anticipates them. Acquisition debt owed to a bank is deductible from the IFI base under CGI article 974, while financial assets sit outside that base altogether. The boundaries are three. Loans repaying capital at term are deemed to amortise, the deduction declining pro rata over the loan's life, and by one twentieth a year where no term is fixed. Where taxable property exceeds €5M and debts exceed 60% of its value, the excess is deductible only as to half, unless the borrower shows the loan was not contracted mainly for tax. And the debt must be real — actually drawn, actually serviced, at market terms; routed through a shareholder account of an SCI it ceases to count for valuing the shares (article 973). Leverage moderates the IFI in its early years and fades by design — a calendar best examined before the compromis rather than after. The 2006 convention adds a succession counterpart: debt contracted to acquire, build, improve or maintain the villa is deducted from its value for the duty the treaty allocates (article 10 §1), so the mortgage follows the asset it financed at death as well.

What the acquisition decides for succession — and for gifts

The 2006 convention governs both succession duty and gift duty, a reach most French succession treaties lack — where the Monaco and United Kingdom instruments leave lifetime gifts to domestic law, the France–Germany text keeps them within its allocation and credit machinery. Its architecture is settled. The villa answers to French duty as the state where it stands, for estates and for gifts alike (article 5 §1); shares of a company whose assets are more than half French real estate are treated as the real estate itself (article 5 §3); and an immovable held through companies in which the deceased or donor, together with spouse, ascendants, descendants or siblings, holds more than half the interests is deemed part of the estate or gift directly (article 5 §4). Germany, taxing by reference to its residents on both sides of a transmission, then credits the French duty (article 11 §2); where the deceased was domiciled in France, France taxes the worldwide estate and credits the German charge (article 11 §1), and a France-domiciled heir engages France's own beneficiary-side rule with the same credit design. Assets outside articles 5 to 8 — portfolios above all — remain with the domicile state alone (article 9).

Where French duty applies, the scale is that of CGI article 777: progressive to 45% in the direct line beyond €1.8M per share, after the €100,000 per-child allowance of article 779, with the surviving spouse exempt in succession. Before either state determines the duty, the civil law determines who inherits, and here the relationship is better equipped than most: both states apply EU Regulation 650/2012, so a German national habitually resident in France may elect German law — and with it German testamentary freedom rather than French forced heirship — for the succession as a whole, while the fiscal allocation above is unaffected by the election. The choice of law, the matrimonial regime carried into the purchase, and the calendar of any gifts are questions for counsel on both sides, best answered before the compromis; the five-of-seven-years domicile clause of article 4 §3 gives the family's first French years a treaty answer of their own.

The démembrement — bare ownership gifted, use retained

The structure commonly proposed alongside the loan divides ownership itself: the buyer retains the usufruct, the use of the villa and its income for life, and gifts the bare ownership to the next generation. The code values the split by age. Under the scale of CGI article 669, bare ownership represents 60% of full value where the usufructuary is between 61 and 70, and 70% between 71 and 80; the gift bears duty on that fraction alone, at today's value, and the reunification of full ownership at the usufructuary's death is not a further taxable transmission. Article 751 sets the conditions — a notarised gift, made more than three months before death, valued on the article 669 scale — and article 968 keeps the full value within the usufructuary's IFI base, so the wealth tax is unmoved. For a German family the treaty setting is tidier than in most relationships: the gift falls within the 2006 convention, France taxes it as the situs state, and Germany's credit follows the ordinary machinery of article 11. The forced-heirship consequences of a gift to children belong with the family's counsel, alongside the choice-of-law election noted above.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 669, 751, 777, 779, 968, 973–974, 990 J, 1649 AB; 2006 convention arts. 5, 9, 10, 11; 1959 convention art. 20 §1; EU Reg. 650/2012

IISelling as a German resident

France taxes first, and here the old convention speaks with modern wording: article 7 §1, as rewritten by the 2015 avenant, assigns gains on French immovables to France, and paragraph 4 of the same article reaches gains on shares and comparable interests that drew more than half their value from French real estate at any time in the 365 days before the sale. For a German-resident seller the French charge runs under CGI article 244 bis A: the taxable gain is reduced by an ownership-duration allowance of 6% for each year of ownership beyond the fifth and 4% for the twenty-second (article 150 VC), the income-tax component then applying at 19% (article 200 B) and extinguishing after 22 years, while the social levies extinguish after 30 and follow the seller's social-security affiliation — for owners within the European social-security coordination, generally at the reduced solidarity rate, verified at engagement. Taxable gains above €50,000 bear in addition the progressive surcharge of article 1609 nonies G, which reaches 6% at the levels this market transacts. Germany being a member state of the European Union, the accredited fiscal-representation requirement borne by third-country sellers does not arise (article 244 bis A, IV bis).

Germany then answers according to what was sold. A villa held directly stays within article 20 §1 a): the gain France has taxed is excluded from the German base, Germany retaining it only for the progression of its rates. Shares of a property-rich company fall instead under article 20 §1 c): Germany taxes the gain and credits the French charge against its own. The choice between selling the asset and selling the shares therefore alters not only the pool of buyers and the French analysis but the German method itself; that choice is best evaluated before marketing begins rather than in the course of negotiation.

Leaving after the sale — a note on the exit tax

Families who sell and then move away from France sometimes ask whether an exit charge applies on departure. The answer is narrower than the name suggests. France's exit tax (CGI article 167 bis) is aimed at securities, not at property: it concerns persons who were French-domiciled for at least six of the ten years before leaving, and taxes the unrealised gains on substantial securities holdings — positions whose combined value exceeds €800,000, or stakes of 50% or more in a company's profits, the second criterion catching a controlling holding whatever its value — as they stand on the day of departure. A villa already sold has settled its own tax under the regimes above, and the sale proceeds themselves are not within the charge. Shares of a family SCI follow the property rather than the portfolio: so long as the company keeps the ordinary income-tax regime, gains on its property-rich shares remain within the real-estate regime (CGI article 150 UB) and outside the exit tax — the French right to tax a later sale being preserved instead by article 244 bis A. A company that has opted for corporation tax changes the classification, and with it the analysis; the option belongs on the pre-departure checklist. The residence clock matters equally: a person who leaves before six years of French domicile within the preceding ten stands outside the latent-gains charge altogether, so the family that tried France for a few years and moved on typically departs untouched; gains already placed under a tax deferral follow their own rules and are reviewed at engagement. Where the machinery does apply, payment is generally deferred, and the assessment lapses automatically where the securities are still held two years after departure — five where the portfolio exceeded €2.57M — or upon a return to France. The France–Germany relationship adds a note of its own: article 7 §6 of the 1959 convention expressly accommodates such taxation on a change of residence after five years or more in one state, and requires the new residence state to take the participations at their value on the day of the move — so a gain taxed on departure is not taxed again on the later sale. For most sellers the exit tax is therefore a question of calendar and paperwork rather than of cost; the destination-specific mechanics of the deferral are settled at engagement.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 1959 convention arts. 7 §§1, 4, 6, 20 §1; CGI arts. 150 UB, 150 VC, 167 bis, 200 B, 244 bis A (incl. IV bis), 1609 nonies G

IIIRenting — as tenant and as owner

Renting as a tenant

A rental year before purchase remains the classic first step, and it carries one caution worth stating clearly: French tax domicile under CGI article 4 B turns on the location of the foyer, the principal place of stay, and the centres of professional and economic interest — none of which defers to a lease. A Riviera villa that becomes the family's effective home can establish French residence, with worldwide consequences, well before any purchase; the treaty windows of articles 19 §6 and 4 §3, described above, then give the calendar of those first years a value of its own. The choice between furnished seasonal lettings and the one-to-three-year civil lease determines exit flexibility, and is best matched to the trial's real purpose.

Renting the villa out

French-source rental income of non-residents — the furnished lettings common at this price point included — is taxed under the minimum-rate regime of CGI article 197 A, at no less than 20% up to the second-bracket ceiling and 30% above it, unless the taxpayer demonstrates a lower worldwide effective rate; social levies apply in addition, at a rate that depends on the owner's social-security affiliation, for German-affiliated owners generally the reduced solidarity rate, verified at engagement. The convention is categorical on the allocation: article 3 makes income from immovable property, however exploited, taxable only in the state where the property stands. Germany accordingly excludes the income from its base under article 20 §1 a), retaining it for the progression of its rates alone; how the exclusion is returned on the German side belongs with the family's German advisers.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 4 B, 197 A; 1959 convention arts. 3, 20 §1 a

4What changed

Edition 1 — baseline (July 2026). The instruments as they stand: the convention of 21 July 1959 as amended by the avenants of 1969, 1989, 2001 and 2015 and modified by the multilateral instrument (in force for France 1 January 2019, for Germany 1 April 2021, Germany's notifications updated 2 October 2024), and the succession and gift convention of 12 October 2006, in force since 3 April 2009. One watch item leads the file: the German finance ministry's treaty-status publication of January 2026 records that negotiations on a revision protocol with France have been opened — this brief will track the instrument from announcement to effect. Further watch items for edition 2: annual Loi de finances movements on the IFI and transfer duties; communal surtaxe votes on the Riviera arc; German legislation on inheritance and gift tax; and any refresh of the administration's 2012–2014-vintage commentary on the 1959 convention, which predates both the 2015 avenant and the multilateral instrument. The ownership aggregates of section 2 are refreshed with each edition.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

5Questions, answered

Does a German resident pay French wealth tax on a Riviera villa?

Yes, once French real-estate assets exceed €1.3M, whether held directly or through the property fraction of company shares (CGI art. 964). The 1959 convention — among the few in this series to cover wealth tax — assigns French-situs property wealth to France (art. 19 §1), and Germany has levied no wealth tax since 1997, so the charge is confirmed by treaty yet never doubled.

Does moving to France expose a German national's worldwide assets immediately?

Not for the first five years. Under article 19 §6 of the 1959 convention, a German national without French nationality who becomes a French resident keeps assets situated outside France out of the French wealth-tax base for the five years following the move, and the window renews after at least three years of non-residence. The 2006 convention adds its own clause: below five years' French domicile in the preceding seven, and absent an intention to stay indefinitely, succession-treaty domicile remains German (art. 4 §3).

Who taxes the gain when a German resident sells a French villa?

France, as the state where the property stands (1959 convention, art. 7 §1), under CGI article 244 bis A with the ownership-duration allowances — the income-tax component extinguishing after 22 years and the social levies after 30. Germany exempts the gain with progression where the villa was held directly, but taxes with a credit where property-rich shares were sold instead (art. 20 §1).

Which country taxes the succession on a French villa?

France, as the situs state (2006 convention, art. 5), and the treaty reads through holding structures: property-rich shares are treated as the property, and companies held above one half by the deceased with close family are looked through. Germany, where it also taxes, credits the French duty (art. 11 §2).

Are lifetime gifts covered by the France–Germany treaty?

Yes — a distinction of this relationship. Where most French succession conventions leave gifts to domestic law, the 2006 convention applies to successions and gifts alike: a gift of the villa, or of its bare ownership, is taxed by France as the situs state, with Germany crediting under the ordinary machinery of article 11.

Is rental income from France taxed if the owner lives in Germany?

Yes, and only by France on the treaty's own terms: article 3 of the 1959 convention makes income from immovable property taxable only in the situs state. France applies the minimum-rate regime of CGI article 197 A, at no less than 20% and 30%, with social levies in addition; Germany excludes the income from its base, retaining it for rate progression alone (art. 20 §1 a).

Does a French exit tax apply after selling and leaving?

Rarely, and never on the villa itself. The charge (CGI art. 167 bis) reaches only persons French-domiciled for six of the ten years before departure, and only their unrealised gains on securities — above €800,000 in value, or stakes of 50% or more of a company's profits; the sold villa and its proceeds stand outside, as do family-SCI shares kept under the ordinary income-tax regime (art. 150 UB). Where it does apply, payment is generally deferred and the assessment lapses after two years — five above €2.57M — or upon return to France; and article 7 §6 of the 1959 convention obliges the new residence state to take over the departure-day value, so the same gain is not taxed twice.

Does a bank loan reduce French wealth tax on a Riviera villa?

Yes. Acquisition debt owed to a bank is deductible from the IFI base under CGI article 974, and pledged financial assets remain outside the tax altogether. The deduction is bounded: interest-only loans are deemed to amortise each year, and where property exceeds €5M and debt exceeds 60% of its value, the excess counts only as to half unless a mainly non-tax purpose is shown. At death, the 2006 convention deducts acquisition and works debt from the villa's own value (art. 10 §1).

What is the Chiron Legal Corpus?

The Chiron Legal Corpus is the research library behind this brief, maintained by this office's offshore legal-research partner: an extensive cross-border collection of consolidated statutes, tax-authority doctrine, treaty instruments and case law, including the French primary sources in full text. Every statement of law in these pages is verified against it, re-checked against Légifrance and BOFiP at each edition, and stamped with its review date section by section.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

6Methodology, sources & qualifications

Method. Legal statements are verified against the Chiron Legal Corpus, the research library maintained by this office's offshore legal-research partner — an extensive cross-border and international collection of consolidated statutes, tax-authority doctrine, treaty instruments and case law, including French primary law held in full text and re-checked against the official sources at each edition. The review of 19 July 2026 covered Légifrance (CGI arts. 4 B, 150 UB, 150 VC, 167 bis, 197 A, 200 B, 244 bis A, 669, 750 ter, 751, 777, 779, 964–965, 968, 973–974, 990 J, 1609 nonies G, 1649 AB — consolidated texts) and both treaty instruments in their official French presentations: the 1959 convention consolidated with its four avenants and the multilateral instrument, and the 2006 succession and gift convention — the authentic texts of both being French and German, with no official English text in existence. The administration's commentary on the 1959 convention (BOI-INT-CVB-DEU-10) dates from 2012–2014 and predates the 2015 avenant and the multilateral instrument; for the 2006 convention the administration published no substantive commentary at all. In both cases this brief follows the treaty text. The German treaty-status position is taken from the federal finance ministry's publication of January 2026; German domestic law is stated at orientation level from secondary sources and is never load-bearing for a legal claim. Market data: DVF (DGFiP), villa sales ≥ €3M, estate-deduplicated, register through 2025-12-31. Ownership aggregates: compiled from public land and company registers, anonymised, as at 19 July 2026. Items flagged "at engagement" — communal rates, social-levy affiliation, the German return of exempted income, the deed-level gain base — are stated at mechanism level pending case-specific verification.

Qualification. This brief documents published law and public transaction data; it is research rather than personalised legal or tax advice, and individual circumstances — residence history, nationality, matrimonial regime, the chain of title — change outcomes. For a live transaction, this office coordinates the appropriate French counsel (avocat fiscaliste, notaire) and executes the property side.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

Further intelligence

The Riviera villa market — the coast-wide €3M+ index

Riviera property tax & relocation — the incoming buyer's primer

France–Ireland — the convention pair

France–Switzerland — the convention pair

Deutsche Ausgabe