France–Hong Kong — The Riviera Private Wealth Brief

0Executive summary

Law reviewed as at 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

1The France–Hong Kong agreement — 2010, income and wealth

The relationship rests on a single instrument, and on a boundary worth stating first. The agreement between the Government of the French Republic and the Government of the Hong Kong Special Administrative Region of the People's Republic of China was signed at Paris on 21 October 2010, approved by the loi of 13 October 2011, published by the décret of 5 December 2011 and entered into force on 1 December 2011, its provisions applying in France from 1 January 2012 and in the Region from the tax year beginning 1 April 2012. The France–China convention of 26 November 2013 does not apply to the Region: the administration's commentary records that the China accord covers neither Hong Kong nor Macao, Hong Kong being governed by the 2010 agreement alone. The two instruments also differ in reach — the China convention covers income only, while the Hong Kong agreement covers taxes on income and on wealth, listing on the French side the income tax, the corporation tax, the taxe sur les salaires, the CSG and CRDS by name, and the impôt de solidarité sur la fortune, and on the Region's side the profits tax, the salaries tax and the property tax. The administration's treaty list of 29 April 2026 records the relationship as covering income and wealth, and no succession or gift convention — an absence that organises much of what follows. This brief quotes the French text published at the Journal officiel, in the administration's consolidated presentation.

The multilateral instrument arrived late, through Peking's signature. The BEPS multilateral convention was signed on 7 June 2017 by France and by China acting for Hong Kong, and it entered into force on 1 January 2019 for France and on 1 September 2022 for the Region, on notifications lodged for Hong Kong on 25 May 2022. Its effects on this agreement are accordingly recent: for taxes other than withholding, periods beginning on or after 23 September 2023; for French withholding taxes, from 1 January 2024. It rewrote the preamble and added the principal-purpose test, under which a treaty advantage can be refused where obtaining it was a principal object of an arrangement; it did not touch the property-rich gains clause, which remains as drafted in 2010 and is examined in section II. The administration's commentary on the agreement (BOI-INT-CVB-HKG) dates from September 2012 and predates all of this; where commentary and text diverge, this brief follows the text.

Residence does the sorting, with the Region's own accents. A person within the tax of both Parties is assigned by the tie-breakers of article 4 §2: permanent home, then centre of vital interests, then habitual abode — then, in place of the usual nationality clause, French nationality on one side and the right of abode in Hong Kong on the other, with mutual agreement closing the cascade. The protocol supplies what the Region's territorial system would otherwise leave open: a Hong Kong resident is a person ordinarily resident there, or present for more than 180 days in a tax year or more than 300 days across two consecutive ones, and the protocol states expressly that taxing only territorial income does not deprive a Party's residents of the agreement's benefit. French domestic law reaches the same residence question through CGI article 4 B — the family's foyer, the principal place of stay, the centres of professional and economic interest — and the agreement settles the conflicts the two systems produce.

The Hong Kong side keeps its own architecture. The Region taxes territorially: profits, salaries and property within Hong Kong bear its three schedular taxes, while foreign-source income stands outside the charge. It levies no tax on capital gains, none on dividends, none on net wealth, and — since estate duty was abolished for deaths from 11 February 2006 — none on inheritances or gifts. This brief states Hong Kong law at orientation level only; its verified ground is the French side and the 2010 agreement, and the Hong Kong reading belongs with the family's advisers in the Region.

Law reviewed as at 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 2010 agreement (CML consolidation) preamble, arts. 2, 4, 28, protocol §§1, 5; BOI-ANNX-000306 (29 April 2026); BOI-INT-CVB-CHN-20241120 §110; BOI-INT-CVB-HKG (2012 vintage — the text prevails)

2The market seen from Hong Kong

Seen from Hong Kong, 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 1,006 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.

Law reviewed as at 20 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 Hong Kong 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 Hong Kong buyers typically retain their own advisers in addition. Because nothing on the Hong Kong side will tax the villa's transmission, the planning that matters is French, and the structure questions of section I bis deserve their answer 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 965, 2°). Here the treaty position is settled rather than absent: the agreement covers wealth taxes, naming the impôt de solidarité sur la fortune and extending to analogous taxes established later (article 2 §4) — the Region's Inland Revenue Department itself records that the agreement applies to the IFI from 1 January 2018 — and article 21 §1 assigns the fortune constituted by French immovables, and by shares drawing more than half their value from them, to France as the Party of situs. Hong Kong levies no net-wealth tax, so no credit ever falls due on the Region's side; the IFI is a French cost of carry, one-sided in practice yet resting on an allocation both administrations have signed — the opposite footing from the Japan, Denmark and Brazil relationships, whose treaties stop at income.

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 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 964–965; 2010 agreement arts. 2, 21; 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 Hong Kong buyer the analysis carries one organising fact: whatever the deed creates will be read, taxed and transmitted under French law alone, since the Region will tax neither the holding, nor the gain it shelters, nor its transmission.

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.

What the acquisition decides for succession — and for gifts

This is the section the two absences write: no succession or gift convention, and no Hong Kong tax at death since estate duty ended for deaths from 11 February 2006. French duty attaches to the villa as French-situs property whatever the owner's domicile, for estates and for lifetime gifts alike, and reads through interposed companies: an immovable held through entities in which the deceased or donor, together with spouse, ascendants, descendants or siblings, holds more than half the interests is deemed held directly (CGI art. 750 ter, 2°). Where the deceased was French-domiciled, or the heir has been French-resident for six of the ten preceding years, France taxes the worldwide transmission instead (art. 750 ter, 1° and 3°). The scale is that of 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. Nothing arrives from the other side to complicate the arithmetic — and nothing arrives to soften it either: France's credit mechanism, article 784 A, credits foreign death duty only against French tax on foreign-situs assets, and with the Region levying no death duty at all there is nothing to credit anywhere in the chain. For a Hong Kong family the French scale is the whole bill, and the instruments that moderate it — the allowances, the gift calendar, the démembrement below, the matrimonial regime carried into the purchase — are all French instruments, best set before the compromis.

The civil law asks its own question first. Hong Kong succession law follows the common-law model — testamentary freedom, tempered by court-ordered provision for dependants rather than by any reserved share — while French law protects children through the réserve héréditaire. Under EU Regulation 650/2012, which France applies to all successions, a person may elect the law of his or her nationality for the succession as a whole; for a Chinese national connected with Hong Kong, the Regulation's rules for states with more than one legal system direct that election toward the succession law in force in the Region, a designation whose mechanics belong with counsel. The election is not the end of the analysis: since the law of 24 August 2021, where the deceased or a child is a national or habitual resident of an EU member state and the law applicable to the succession allows no reserved-share mechanism for children, each child may take a compensatory levy on assets situated in France — the villa first among them — up to the French reserved share (Code civil, art. 913, al. 3). A law built on testamentary freedom sits squarely within that condition, so the point is live for families with European connections; the will, the matrimonial regime and the calendar of any gifts are questions for counsel on both sides, best answered before the compromis.

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 Hong Kong family the setting is unusually clean: the gift falls within no convention, France taxes it as the Party of situs on the French scale, and no Hong Kong charge answers on the donee's side — the French gift duty on the discounted fraction is the transmission's entire cost. 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 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 669, 750 ter, 751, 777, 779, 784 A, 968, 973–974, 990 J, 1649 AB; Code civil art. 913; EU Reg. 650/2012; 2010 agreement arts. 6 §5, 13, 21, 22

IISelling as a Hong Kong resident

France taxes first, as the Party where the property stands: article 13 §1 a) assigns gains on French immovables to France, and paragraph 1 b) reaches gains on shares, parts or other rights — in a société, a fiducie or a comparable institution — that draw more than half their value, directly or indirectly, from French real estate. The clause is the agreement's own 2010 drafting, untouched by the multilateral instrument, and it carries its own carve-outs: shares listed on the regulated markets of the European Union or on the Stock Exchange of Hong Kong, disposals within reorganisations of the kind the European merger directive describes, and companies whose property houses their own business. A separate rule (article 13 §3) keeps gains on substantial participations — 25% or more of profit rights — taxable in the Party where the company is resident. For a Hong Kong-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. 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.

Two features distinguish the third-country seller. First, the social levies apply at their full combined rate of 17.2%, the reduced solidarity rate being reserved to sellers within the European social-security coordination — an affiliation a Hong Kong-resident seller does not hold. Notably, the agreement lists the CSG and CRDS among the French taxes it covers, so these levies sit inside the treaty rather than beside it; with no Hong Kong tax on the gain, the point remains one of classification rather than of relief. Second, representation: a seller domiciled outside the EU and the EEA appoints a representative accredited by the French administration, who answers for the filing and the payment (article 244 bis A, IV). The administration's own doctrine grants automatic dispenses — sales at €150,000 or less per seller, and sales fully exempt through the thirty-year holding clock — under its instruction of 22 January 2025, and the deed's notaire ordinarily organises the appointment where one is required.

Hong Kong then answers as the residence Party — by not answering. The Region levies no capital-gains tax, and its territorial system leaves a French gain outside the charge in any event, so the French assessment is in practice the final one. The agreement's credit article (22 §2) stands ready for the rare configurations in which a Hong Kong tax does reach the proceeds, crediting the French tax within the limit of the Region's own. The choice between selling the asset and selling the shares of a property-rich company therefore alters the pool of buyers and the French filing mechanics more than the allocation itself, which article 13 keeps with France on both routes; that choice is still 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. 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 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 2010 agreement arts. 2, 13 §§1, 3, 22 §2, protocol §9; CGI arts. 150 UB, 150 VC, 167 bis, 200 B, 244 bis A (incl. IV), 1609 nonies G; BOI-RFPI-PVINR-30-20 (22 Jan 2025)

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, and the tie-breakers of article 4 §2 of the agreement then decide which Party prevails. The mirror runs in day-counts: the protocol keeps Hong Kong residence for a person present in the Region more than 180 days in a tax year, or more than 300 across two consecutive ones, so a family dividing its year can find the calendar itself deciding the question. 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; the social levies apply in addition at the full 17.2% rate borne by owners outside the European coordination. The agreement assigns the income to France as the Party of situs, whatever the form of exploitation (article 6 §§1 and 3), reaching even the enjoyment of property held through shares of a société or a fiducie (article 6 §5), and leaves the allocation non-exclusive. On the Region's side the allocation is academic in the ordinary case: Hong Kong's property tax reaches Hong Kong immovables only, and its territorial system leaves French rents outside the charge, so the French tax is the letting's final cost.

Law reviewed as at 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 4 B, 197 A; 2010 agreement arts. 4 §2, 6, 22, protocol §5

4What changed

Edition 1 — baseline (July 2026). The instruments as they stand: the agreement of 21 October 2010, in force since 1 December 2011, as modified by the multilateral instrument — in force for France since 1 January 2019 and for Hong Kong since 1 September 2022, on notifications lodged by China for the Region on 25 May 2022, its effects running from taxable periods beginning 23 September 2023 and, for French withholding taxes, from 1 January 2024. No avenant to the agreement exists, and no succession or gift convention is recorded or under negotiation; this brief will track any announcement, since a first France–Hong Kong succession instrument would rewrite section I bis entirely. The administration's commentary on the agreement (BOI-INT-CVB-HKG) dates from September 2012 — before the multilateral instrument — and this brief follows the treaty text where the two diverge. Further watch items for edition 2: annual Loi de finances movements on the IFI and transfer duties; communal surtaxe votes on the Riviera arc; movements in the Region's own legislation, whose concessionary regimes for funds and family holdings have been active files in recent years; and any refresh of the 2012 commentary. The ownership aggregates of section 2 are refreshed with each edition.

Law reviewed as at 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

5Questions, answered

Does the France–China tax treaty cover a Hong Kong buyer?

No. The administration's commentary states that the France–China convention of 2013 applies neither to Hong Kong nor to Macao; the Region is governed exclusively by the agreement signed at Paris on 21 October 2010 (BOI-INT-CVB-HKG). The two differ in scope as well as in text — the China convention covers income only, while the Hong Kong agreement covers income and wealth.

Does a Hong Kong 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 2010 agreement covers wealth taxes — it lists the ISF and extends to its successor, and Hong Kong's Inland Revenue Department records that it applies to the IFI from 1 January 2018 — and its article 21 confirms France's right to tax as the Party where the property stands. Hong Kong levies no wealth tax of its own, so the charge is one-sided in practice.

Which country taxes the succession on a French villa?

France alone. No succession or gift convention exists between France and Hong Kong, and the Region has levied no estate duty on deaths since 11 February 2006, taxing neither inheritances nor gifts. French duty attaches to the villa as French-situs property, reading through family-held companies (CGI art. 750 ter), at rates reaching 45% in the direct line — with no foreign duty anywhere in the chain for any credit to absorb.

Who taxes the gain when a Hong Kong resident sells a French villa?

France, as the Party where the property stands (agreement, art. 13 §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. Hong Kong levies no capital-gains tax and taxes territorially, so no second assessment ordinarily arrives; the French charge is in practice the final one.

Does the sale require a fiscal representative?

As a rule, yes. A seller domiciled outside the EU and the EEA appoints a representative accredited by the French administration, who answers for the filing and the payment (CGI art. 244 bis A, IV). Automatic dispenses cover sales at €150,000 or less per seller and sales fully exempt through the thirty-year holding clock; the deed's notaire ordinarily organises the appointment where one is required.

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

Yes — France taxes it first as the Party of situs (agreement, art. 6), under the minimum-rate regime of CGI article 197 A at no less than 20% and 30%, with social levies at 17.2% in addition. Hong Kong's territorial system leaves French rents outside its own charge, so the French tax is the letting's final cost.

Does French forced heirship bind a Hong Kong family?

It can. Hong Kong succession law rests on testamentary freedom, with court-ordered provision for dependants rather than a reserved share. Under EU Regulation 650/2012 a choice of the law of nationality is available, yet since 2021, where the deceased or a child is an EU national or resident and the applicable law allows no reserved-share mechanism, each child may take a compensatory levy on French-situs assets — the villa first among them (Code civil, art. 913, al. 3). The point is assessed on the succession's actual facts, with counsel on both sides.

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.

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 20 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 20 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, 784 A, 964–965, 968, 973–974, 990 J, 1609 nonies G, 1649 AB; Code civil art. 913 — consolidated texts), the agreement of 21 October 2010 in its official French consolidation — the multilateral instrument incorporated, as published by the administration — the administration's treaty list of 29 April 2026, which records the France–Hong Kong relationship as covering income and wealth and no succession or gift instrument, and its commentary on the China convention, which records that the latter does not apply to the Region. The administration's commentary on the agreement (BOI-INT-CVB-HKG) dates from September 2012 and predates the multilateral instrument; this brief follows the treaty text. The non-resident representation and dispense mechanics follow the administration's instruction of 22 January 2025. Hong Kong domestic law — the territorial system, the absence of capital-gains, dividend, wealth and death taxation, the abolition of estate duty for deaths from 11 February 2006, and the succession-law model — is stated at orientation level from the Region's own published sources and is never load-bearing for a legal claim. Market data: DVF (DGFiP), villa sales ≥ €3M, estate-deduplicated, register through 2025-12-31. Items flagged "at engagement" — communal rates, the rare Hong Kong configurations touching French-taxed 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 20 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

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