France–Germany — Tax Treaty

1The two conventions, and which of them answers your question

France and Germany run on two instruments, and knowing which one governs is the first thing that saves you money. The tax convention of 21 July 1959 — amended four times and consolidated with the multilateral instrument — covers income and fortune. The convention of 12 October 2006, in force since 3 April 2009, covers successions and gifts. Almost no other relationship in this collection has the second; it is the reason the death section of this brief reads nothing like its neighbours.

Residence sorts the first question. Where both states tax the same person, the 1959 convention applies the familiar cascade — permanent home, centre of vital interests, habitual abode, nationality, then agreement between the two administrations. Succession domicile is settled separately, by article 4 of the 2006 convention, and it does not follow the income answer: a German who has lived in France fewer than five of the last seven years keeps a German succession domicile. The two calendars can therefore disagree about you, on purpose.

What Germany itself charges shapes everything below. Germany has levied no wealth tax (Vermögensteuer) since 1997, so the French wealth charge is unsheltered by any German equivalent and never doubled. German inheritance and gift tax (Erbschaft- und Schenkungsteuer) is very much alive, which is why the 2006 convention matters, and it cumulates gifts made within ten years. German law is stated here at orientation level: the verified ground of this brief is the French side and the two conventions, and the German reading belongs with your German advisers.

Sources considered: 1959 convention (consolidated) arts. 2, 3, 19; 2006 convention arts. 1, 4; BOI-INT-CVB-DEU. Scope note: German statutes and case law are outside our agency’s verified corpus; nothing load-bearing here rests on them.

Reviewed as at 10 August 2026 · 1959 convention arts. 2, 3, 19; 2006 convention arts. 1, 4

2What you pay to buy a property in France, and what it costs you every year

The purchase follows the standard French sequence: your offer; the pre-sales contract (compromis de vente), with its ten-day cooling-off period and a deposit of usually 10%; the conditions precedent; then the deed itself (acte authentique), signed before the notaire — the public officer who draws it up, collects the duties and registers your title. German buyers usually keep their own advisers as well: the notaire is not the buyer’s counsel. Settle the structure questions of § 3 before the compromis, because the wealth article, the gains article and the 2006 convention each read a holding company differently.

Worked example — the median Saint-Tropez peninsula villa in the DVF register (€4.9M, 2014–2025, sales of €3M and above):

The notaire itemises duties and émoluments on the actual deed; a new-build VAT regime, furniture carve-outs or mortgage security change the arithmetic. The figures state the published scales, for orientation.

Owning brings one French charge that matters at this level. CGI article 964 levies the annual wealth tax (IFI) on French real-estate assets above €1,300,000 — for a non-resident, French property plus the French-property fraction of company shares (article 965). Article 19(1) of the 1959 convention assigns French immovable wealth to France, so the treaty confirms the charge rather than shelters it. Germany has levied no wealth tax since 1997, so nothing on the German side doubles it.

A move to France starts two treaty calendars, and they are the most valuable planning facts in this relationship. Article 19(6) of the 1959 convention says that for a person resident in France who holds German nationality WITHOUT holding French nationality, property situated outside France is left out of the French wealth-tax base on 1 January of each of the five calendar years following the year of arrival. Note both conditions: it is the treaty’s window, not the French statute’s, and it does not reach a dual French-German national. Separately, article 4 of the 2006 convention keeps your succession domicile German until you have lived in France five of the last seven years. Plan the move, and any gift, against both.

Two recurring local charges follow the property. The annual local property tax (taxe foncière) runs at communal rates. For furnished second homes, communes in designated high-demand areas (zone tendue) — including the marquee Riviera communes — may vote a surcharge (surtaxe) on the residence tax, and every owner files the annual occupancy declaration. These rates are communal and year-specific, so this brief re-verifies them at each edition.

Borrowing against the property belongs to the structure decision. A debt is deductible from the wealth-tax base only where actually incurred for the taxable asset; in-house and non-amortising arrangements are capped or reconstructed on a notional amortisation (CGI arts. 973–974). Where taxable property exceeds €5M and debts exceed 60% of its value, the excess is deductible only as to half unless you show the loan was not contracted mainly for tax. Settle it with the lender and your French tax lawyer (avocat fiscaliste) before the offer.

Sources considered: CGI arts. 964, 965, 968, 973–974; 1959 convention arts. 19(1), 19(6); 2006 convention art. 4. Scope note: the five-year wealth window is read verbatim from the treaty text, including its nationality condition; German domestic law is stated at orientation level only.

Reviewed as at 10 August 2026 · CGI arts. 964–965, 973–974; 1959 convention art. 19(1), 19(6)

3Five ways to own a French property, and what follows from each

One rule organises the structure question here, and it runs the opposite way to most of this collection: the WEALTH article follows your company. Article 19(2) of the 1959 convention taxes wealth constituted by shares in a company whose assets are principally immovables in one of the two states where those immovables sit — with one express carve-out: property the company uses for its own industrial, commercial, agricultural or professional activity is left out of that calculation. So a holding company does not move the French wealth charge on a family property, and the only route out of it is a company that genuinely trades from the property. That is a question of what the company does, established on the file.

What follows is a map of questions for counsel, not a route.

Our agency prepares a free valuation for owners at valuation.elenaagueeva.com. An agent contacts you within 48 hours to arrange a visit.

It rests on the same official records a French property valuer (expert immobilier) works from: the government's register of recorded sale prices, the cadastre, and the planning permits granted on the parcel. The agent then visits to appraise the view, the garden, and the quality of the construction and the finishes. The valuation report (avis de valeur) is produced within 48 hours of the visit.

The same figure carries your French filings. Wealth tax, the 3% company tax and gift duty are all declared at the property's market value. The law takes that value from your own detailed estimate (articles 761 and 973 of the tax code), and asks no particular valuer to produce it. A court-appointed expert (expert judiciaire) belongs to litigation, not to a declaration. If the administration challenges your figure, a dated, written valuation resting on comparable sales is what supports it.

The first valuation of a property is free for its owner or seller. A repeat valuation of the same property, or one commissioned by a family office, a bank or another adviser for a client, is a billable engagement — ask us for terms.

Sources considered: 1959 convention arts. 19(2), 7(4); 2006 convention arts. 1, 11; CGI arts. 669, 751, 968, 990 D–990 E. Scope note: the article 19(2) carve-out turns on the company’s actual activity, a question of fact settled on the file.

Reviewed as at 10 August 2026 · 1959 convention arts. 19(2), 7(4); 2006 convention arts. 1, 11

4What you pay when you sell

France taxes first. Article 7(1) of the 1959 convention assigns gains on French immovables to France, and article 7(4) — as consolidated with the multilateral instrument — extends that to shares and similar interests, including in partnerships and trusts, where they drew their value principally from immovables at any moment 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 falls by 6% for each year of ownership beyond the fifth and 4% for the twenty-second (art. 150 VC); the income-tax component applies at 19% (art. 200 B) and ends after 22 years; the social levies end after 30 and follow your affiliation — within the European coordination, generally the reduced solidarity rate. Gains above €50,000 bear the surcharge of article 1609 nonies G, reaching 6% at the levels this market transacts. Germany is an EU member state, so the accredited fiscal-representation requirement does not arise (art. 244 bis A, IV bis).

Worked example — the duration clock, per €1,000,000 of gross gain on a property sold at the Saint-Tropez peninsula median of €4.9M:

The German side then differs by route, and this is the practical reason the structure decision reaches the sale. Article 20(1)(a) excludes from the German base the income and the wealth situated in France that the convention makes taxable in France, while allowing Germany to take them into account in fixing its rate — exemption with progression. On a directly held property that is the end of it. On property-rich shares, relief runs by credit instead, so the German charge is reduced by the French tax rather than removed. Two routes to the same asset, two different German outcomes.

Families who sell and then leave France sometimes ask about the exit tax. CGI article 167 bis reaches only people French-domiciled for six of the ten years before departure, and only their unrealised gains on securities — holdings above €800,000, or stakes of 50% or more. A property already sold has settled its own tax, and the proceeds are outside the charge; shares of a family SCI on the ordinary income-tax regime stay in the real-estate regime (art. 150 UB) and outside it.

Sources considered: 1959 convention arts. 7(1), 7(4), 20(1); CGI arts. 150 UB, 150 VC, 167 bis, 200 B, 244 bis A (incl. IV bis), 1609 nonies G. Scope note: how the German credit or exemption is returned in the German declaration belongs with advisers in Germany.

Reviewed as at 10 August 2026 · 1959 convention arts. 7, 20(1); CGI arts. 150 VC, 244 bis A

5Renting before you buy, and renting your property out

A rental year before purchase remains the classic first step, with one caution: French tax residence under CGI article 4 B turns on the household (foyer), the principal place of stay and the centres of professional and economic interests — none of which defers to a lease. A property that becomes the family’s effective home can establish French residence, with worldwide consequences, well before any purchase. It also starts the two treaty calendars of § 2, so the date of arrival is worth recording rather than reconstructing later.

Renting the property out reverses the flow. French-source rental income of non-residents — furnished rentals included — is taxed under the minimum-rate regime of CGI article 197 A: no less than 20% up to the second-bracket ceiling and 30% above it, unless you demonstrate a lower worldwide effective rate. Social levies apply in addition, at the rate your affiliation commands. Article 3(1) of the 1959 convention assigns income from immovable property to the state where the property sits, and article 20(1)(a) then excludes it from the German base, and Germany may still take it into account in setting its rate.

Sources considered: CGI arts. 4 B, 197 A; 1959 convention arts. 3(1), 20(1)(a). Scope note: treatment turns on the form of exploitation and on affiliation, both questions of fact.

Reviewed as at 10 August 2026 · CGI arts. 4 B, 197 A; 1959 convention arts. 3, 20

6What happens to the property when you die, or give it away

This is the section that sets the pair apart. France and Germany concluded a convention on successions AND gifts on 12 October 2006, in force since 3 April 2009. Where most relationships in this collection leave death to two unrelated domestic laws, here one instrument divides the assets and then tells Germany what to credit.

Article 1 sets the reach: successions of persons domiciled in either state at death, and gifts made by persons domiciled in either state when they give. Article 4 decides domicile, with the same cascade as the income treaty — permanent home, centre of vital interests, habitual abode, nationality, then agreement — and it carries the rule that matters on a recent move: below five years of French residence in the last seven, a German national keeps a German succession domicile. Articles 5 to 8 then work asset by asset, and French immovable property is taxable in France.

Article 11 is the machinery. Where the deceased or the donor was domiciled in Germany, Germany credits against its own tax the French tax paid on the assets that articles 5 to 8 make taxable in France. And where an heir, legatee or donee was domiciled in Germany at the time, Germany may tax everything that person receives, crediting the French tax under its own foreign-tax rules. Both states charge; the credit is what stops them stacking — which is precisely what a pair without a succession convention cannot offer.

On the French side the scale is CGI article 777: progressive to 45% in the direct line above €1.8M per share, after the €100,000 per-child allowance of article 779, with the surviving spouse exempt in succession. German allowances are computed on their own scale and cumulate gifts made in the preceding ten years, which is why a gift programme in this relationship is a calendar question on both sides at once — and why the 2006 convention covering gifts is worth as much as its covering deaths.

Before either state computes a duty, the civil law decides who inherits. Both states apply EU Regulation 650/2012, so a German national habitually resident in France may elect German law for the succession as a whole. The election changes the mechanics rather than which country taxes what, and the choice, 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.

Sources considered: 2006 convention arts. 1, 4, 5–8, 11 and protocol ¶1; CGI arts. 669, 750 ter, 751, 777, 779, 968; EU Regulation 650/2012. Scope note: German inheritance and gift tax, its allowances and its ten-year cumulation are stated at orientation level only — German statutes are outside our agency’s verified corpus.

Reviewed as at 10 August 2026 · 2006 convention arts. 1, 4, 11; CGI arts. 750 ter, 777, 779

7The eight questions German owners ask most

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

Yes, once French real-estate assets exceed €1.3M (CGI art. 964). Article 19(1) of the 1959 convention assigns French immovable wealth to France, so the treaty confirms the charge. Germany has levied no wealth tax since 1997, so it is never doubled.

Does holding through a company avoid the French wealth tax?

No, as a rule. Article 19(2) taxes shares of a company whose assets are principally immovables where those immovables sit. The one carve-out is property the company uses for its own industrial, commercial, agricultural or professional activity — a real trading use, established on the file.

Is there a France–Germany succession convention?

Yes, and it covers gifts too: the convention of 12 October 2006, in force since 3 April 2009. It divides the assets — French property to France — and article 11 makes Germany credit the French tax against its own.

What do the first five years in France change?

Two things, both from the treaties. Article 19(6) of the 1959 convention leaves property outside France out of your French wealth-tax base on 1 January of each of the five years following arrival — but only if you hold German nationality and not French. And article 4 of the 2006 convention keeps your succession domicile German below five years of French residence in the last seven.

Who taxes the gain when a German resident sells?

France, as the state where the property stands (art. 7(1)), under CGI article 244 bis A with the duration allowances — the income-tax part ending after 22 years and the social levies after 30. Germany exempts the gain on a directly held property; on property-rich shares it relieves by credit instead.

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

Yes, by France: article 3(1) assigns income from immovable property to the state where it sits, and France applies the minimum-rate regime of CGI article 197 A — no less than 20%, 30% above the second-bracket ceiling — with social levies in addition. Germany excludes the income from its base and takes it into account for its rate (art. 20(1)(a)).

Does a bank loan reduce French wealth tax on the property?

Yes. Acquisition debt owed to a bank is deductible from the IFI base (CGI art. 974), and pledged financial assets stay outside the tax. The deduction is bounded: interest-only loans are treated as if repaid gradually, 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.

Do the children keep German inheritance law?

They can. Both states apply EU Regulation 650/2012, so a German national habitually resident in France may elect German law for the whole succession. The election changes who inherits and in what shares; it leaves the 2006 convention's division of the tax untouched.

Sources considered: the sections above; these answers condense them and inherit their scope notes.

Reviewed as at 10 August 2026 · condensed from §§ 1–6

8The court decisions, the sources and the sales figures

What our agency is watching

Edition 2 baseline, August 2026. The instruments stand as § 1 records them: the 1959 convention as amended in 1969, 1989, 2001 and 2015 and consolidated with the multilateral instrument, and the 2006 succession and gift convention in force since 3 April 2009. Watch items: annual Loi de finances movements on the IFI and transfer duties; communal surcharge votes on the Riviera arc; German reform of inheritance-tax allowances, which changes the size of the credit rather than its mechanism; and any refresh of the administration’s commentary on either convention.

The market, from the register

Seen from Germany, the Riviera’s €3M+ villa market leads with the Saint-Tropez peninsula, the largest register of the coast: 1,006 qualified sales for €7,049M across 2014–2025, at a €4.9M median and an €85.5M ceiling. Cannes and its hills — the Super Cannes quarter included — contributed 306 sales for €2,066M at the same €4.9M median. Saint-Jean-Cap-Ferrat remains the narrowest and most expensive register: 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 », the French government’s official record of property transactions, published by the tax administration), villa sales ≥ €3M, 2014–2025, each sale counted once — the same method as the published Riviera Intelligence pages. Register through 2025-12-31.

How this brief was checked, and its limits

Legal statements are verified against the Chiron Legal Corpus — the research library maintained by our legal-research partner — and re-checked against the official sources at each edition. The review of 10 August 2026 read the 1959 convention in its consolidated French presentation (arts. 3, 7, 19 and 20 re-read against the raw text, article 19(6) verbatim) and the 2006 succession and gift convention (arts. 1, 4, 5–8, 11 and its protocol), together with the consolidated CGI articles cited section by section. German domestic law is stated at orientation level from secondary sources and is never load-bearing. Market data: DVF, villa sales ≥ €3M, each sale counted once, register through 2025-12-31. Items flagged “when our agency takes the file” — 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.

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, our agency coordinates the French counsel the file needs (avocat fiscaliste, notaire) and executes the property side.

Sources considered: the review record above; the DVF register. Scope note: where this section and a numbered section differ, the numbered section governs.

Reviewed as at 10 August 2026 · full review record above

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–Mauritius — the convention pair

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