France–Italy — Tax Treaty

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

France and Italy run on two instruments, and knowing which one governs is the first thing that saves you money. The tax convention signed at Venice on 5 October 1989 — in force since 1 May 1992, and the replacement for the convention of 1958 — covers income and wealth. The convention signed at Rome on 20 December 1990, in force since 1 April 1995, covers successions and gifts. Almost no other relationship in this collection has the second, and it is the reason the death section of this brief reads nothing like its neighbours.

One absence shapes the rest. Italy signed the BEPS multilateral instrument on 7 June 2017 and has never deposited its ratification, so the 1989 convention applies exactly as written. There is no principal-purpose article here and no 365-day look-back on property-rich shares — the tests that now govern the German, Danish and Finnish relationships. What this pair has instead is a protocol that names the property-company case three separate times, and § 3 sets it out.

Residence sorts the first question. Article 4 settles a double claim on the familiar cascade — permanent home, centre of vital interests, habitual abode, nationality, then agreement between the administrations — and it carries one sentence worth reading twice: a person liable to tax in a state only on income arising there is not a resident of it for the convention. Succession domicile is settled separately, by article 4 of the 1990 convention.

Italy’s substitute-tax regime for new residents belongs here rather than in a footnote, because it is what most often brings this pair to a desk. Since 2017 a person moving tax residence to Italy may elect to pay a flat annual sum on foreign income instead of Italian tax on it — €100,000 at first, €200,000 for transfers from August 2024, and €300,000 plus €50,000 per family member for transfers of residence from 1 January 2026, with earlier entrants keeping their rate. It changes what Italy charges. It does not change what France charges on French property, which is the subject of every section below. Whether a treaty benefit survives where the other state does not actually tax the income is a separate question, and the text asks it at protocol point 15: where the convention obliges a state to exempt income, the exemption is granted if and to the extent that income is taxable in the other state. This brief states the mechanism and settles the case on the file.

What Italy itself charges shapes the rest, and is stated here at orientation level. Italy has never levied a wealth tax on net assets, which is why protocol point 11(c) provides that the two states would consult if it ever did. It does levy IVIE on immovables its residents own abroad, at 1.06% from the 2024 tax year, with credit for foreign property taxes. Italian succession and gift tax runs at 4% in the direct line above €1,000,000 per beneficiary. Italian law is outside our agency’s verified corpus and nothing load-bearing here rests on it.

Sources considered: 1989 convention arts. 1, 2, 4, 23 and protocol points 11(c), 15; 1990 convention arts. 1, 4; OECD multilateral instrument status list (18 June 2026); BOI-INT-CVB-ITA. Scope note: Italian statutes and the substitute-tax regime are stated at orientation level from secondary sources; nothing load-bearing here rests on them.

Reviewed as at 11 August 2026 · 1989 convention arts. 2, 4, 23; protocol points 11(c), 15; 1990 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. Italian 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.

Worked example — the median Saint-Jean-Cap-Ferrat property in the DVF register (€6.5M, 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 23 of the 1989 convention assigns French immovable wealth to France, so the treaty confirms the charge rather than shelters it. Italy has never levied a wealth tax, so nothing on the Italian side doubles it, and protocol point 11(c) provides for the two states to consult if that ever changes.

A move to France starts the most valuable calendar in this relationship, and it is worth reading in full. Protocol point 11(b) says that for the French wealth tax of an individual resident in France who holds Italian nationality WITHOUT French nationality, assets situated outside France held on 1 January of each of the five years following the year of arrival are left out of the base for each of those five years. The same paragraph then does something no other instrument in this collection does: if that person stops being French-resident for at least three years and later becomes French-resident again, the five-year window runs again from the new arrival. Note both conditions on the first limb — it is the treaty’s window rather than the statute’s, and it does not reach a dual French-Italian national.

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; 1989 convention art. 23 and protocol points 11(a), 11(b), 11(c). Scope note: the five-year wealth window is read verbatim from the protocol, including its nationality condition and its renewal limb; Italian law is stated at orientation level only.

Reviewed as at 11 August 2026 · CGI arts. 964–965, 973–974; 1989 protocol point 11(b) read verbatim

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

One fact organises the structure question here, and it is unusually complete: the 1989 protocol names the property-company case three separate times, once for each thing a property produces. Point 3 sends the INCOME from shares in a company owning immovables to the state where those immovables sit. Point 8(a) sends the GAIN on the same shares there. Point 11(a) sends the WEALTH they carry there. All three turn on the same condition — that the state’s own law taxes such shares as it taxes immovable property, which French law does — and points 8(a) and 11(a) carry one express carve-out: property the company uses for its own industrial, commercial, agricultural or non-commercial activity is left out.

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

The asymmetry at death is worth naming, because it runs one way. Article 5(3) of the 1990 convention treats the shares of a property-rich company as immovable property for France, and not for Italy. So a French SCI holding the property is reached by French duty at death whatever else is true; the mirror case does not follow automatically, and it is settled with Italian counsel rather than assumed from the French reading.

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: 1989 convention protocol points 3, 8(a), 8(b), 11(a); 1990 convention art. 5(3); CGI arts. 669, 751, 968, 990 D–990 E. Scope note: the trading-use carve-out turns on the company’s actual activity, a question of fact settled on the file.

Reviewed as at 11 August 2026 · 1989 protocol points 3, 8, 11(a); 1990 convention art. 5(3)

4What you pay when you sell

France taxes first. Article 13 of the 1989 convention assigns gains on French immovables to France, and protocol point 8(a) extends that to shares in a company owning them, because French law taxes those gains as it taxes gains on immovable property. Point 8(b) adds a separate route: gains on a holding carrying 25% or more of a company’s profits are taxable in the state of which that company is a resident, under its own law. For an Italian-resident seller the French charge runs under CGI article 244 bis A, and it has three parts. The taxable gain falls by 6% for each year of ownership beyond the fifth, and by 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. Gains above €50,000 bear the surcharge of article 1609 nonies G. Italy 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-Jean-Cap-Ferrat median of €6.5M:

On the holding periods this coast’s pockets actually show — frequently two decades and more — the income-tax component has often extinguished by the time of sale, and the social levies are what remain. Figures computed on the statutory scales; the actual base is itemised on the deed when our agency takes the file.

Italy then answers by the credit method. Article 24(2) lets Italy include the income in its own base and deduct the French tax from the Italian tax on it, within the Italian tax attributable to that income — an ordinary credit, and one that runs on income alone, because Italy has no wealth tax for the wealth limb to work on. Article 24(1) runs the other way for a French resident with Italian-taxable wealth.

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: 1989 convention arts. 13, 24 and protocol points 8(a), 8(b); CGI arts. 150 UB, 150 VC, 167 bis, 200 B, 244 bis A (incl. IV bis), 1609 nonies G. Scope note: how the Italian credit is returned in the Italian declaration belongs with advisers in Italy.

Reviewed as at 11 August 2026 · 1989 convention arts. 13, 24; protocol point 8; 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 five-year clock of § 2, so the date of arrival is worth recording rather than reconstructing later.

Renting the property out reverses the flow, and this is where the protocol reading changes the answer. 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 6 of the 1989 convention assigns income from immovable property to the state where the property sits. And where the property is held through a company, protocol point 3 assigns the income from those shares to that same state, on the same condition as the gains and wealth limbs — that its law taxes such income as income from immovable property. The company route does not move the rental income any more than it moves the wealth.

Sources considered: CGI arts. 4 B, 197 A; 1989 convention art. 6 and protocol point 3. Scope note: treatment turns on the form of exploitation and on affiliation, both questions of fact.

Reviewed as at 11 August 2026 · CGI arts. 4 B, 197 A; 1989 convention art. 6; protocol point 3

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

This is the section that sets the pair apart. France and Italy concluded a convention on successions AND gifts at Rome on 20 December 1990, in force since 1 April 1995. Where most relationships in this collection leave death to two unrelated domestic laws, here one instrument divides the assets and then tells Italy 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 5(1) assigns immovable property to the state where it stands, and article 5(3) treats the shares of a company whose assets are principally immovables as the property itself — for France, and not for Italy. Article 9 then gives everything the earlier articles do not reach to the domicile state ALONE, in terms that leave no room for a second claim: those assets are taxable only there. For an Italian-domiciled deceased that displaces the French rule which would otherwise tax an heir long resident in France on what they receive worldwide.

Article 11 is the machinery. The domicile state taxes the whole estate or gift, including what the convention makes taxable in the other state, and credits the tax paid there, capped at its own tax on those assets. Both states charge; the credit is what stops them stacking.

The 1990 protocol carries the pair’s second five-year rule, and its wording matters. Take a person who held the nationality of one state without the other’s, and would otherwise have been domiciled in both. They count as domiciled only in the nationality state. Two conditions carry that: they manifestly intended to keep their domicile there, and they were domiciled in the other state for less than five years in total in the seven years before death. Read the last three words: the paragraph is written for the moment of death, so a lifetime gift is settled on article 4 without it.

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. The Italian side is stated at orientation level: 4% in the direct line above €1,000,000 per beneficiary, which is a different shape from the French scale rather than a different rate on the same one. And before either state computes a duty, the civil law decides who inherits — both states apply EU Regulation 650/2012, so an Italian national habitually resident in France may elect Italian law for the succession as a whole. Italy has its own reserved-share system, the legittima, so that election changes the shares rather than removing the constraint.

Sources considered: 1990 convention arts. 1, 4, 5(1), 5(3), 8, 9, 10, 11 and protocol points (a), (b), (c); CGI arts. 669, 750 ter, 751, 777, 779, 784 A, 968; EU Regulation 650/2012. Scope note: Italian succession and gift tax and the legittima are stated at orientation level only — Italian statutes are outside our agency’s verified corpus.

Reviewed as at 11 August 2026 · 1990 convention arts. 1, 5, 9, 11; protocol point (b); CGI arts. 750 ter, 777, 779

7The eight questions Italian owners ask most

Does an Italian resident pay French wealth tax on a Riviera property?

Yes, once French real-estate assets exceed €1.3M (CGI art. 964). Article 23 of the 1989 convention assigns French immovable wealth to France, so the treaty confirms the charge. Italy has never levied a wealth tax, so it is never doubled.

What do the first five years in France change?

Protocol point 11(b) 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 Italian nationality and not French. Leave France for three years and return, and the five years run again.

Is there a France–Italy succession convention?

Yes, and it covers gifts too: the convention of 20 December 1990, in force since 1 April 1995. It divides the assets — French property to France — and article 11 makes the domicile state credit the tax paid in the other.

Does holding through a company avoid the French charge?

No. The 1989 protocol reaches the property-company case three times: point 3 for the income, point 8(a) for the gain, point 11(a) for the wealth, each because French law taxes such shares as it taxes immovable property. The one carve-out is property the company genuinely trades from.

Who taxes the gain when an Italian resident sells?

France, as the state where the property stands (art. 13), under CGI article 244 bis A with the duration allowances — the income-tax part ending after 22 years and the social levies after 30. Italy then credits the French tax against its own (art. 24(2)).

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

Yes, by France: article 6 assigns income from immovable property to the state where it sits, and protocol point 3 says the same for income from shares in a company that owns it. 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.

Does Italy’s substitute-tax regime shelter the French property?

No. It changes what Italy charges on foreign income, not what France charges on French property, and the French wealth tax, the French gain and the French succession duty are unaffected. Whether a particular treaty benefit survives where Italy does not actually tax the income is a separate question, asked at protocol point 15 and settled on the file.

Does a French exit tax apply after selling and leaving?

Rarely, and never on the property itself. CGI article 167 bis reaches only people French-domiciled for six of the ten years before departure, and only their unrealised gains on securities — above €800,000, or stakes of 50% or more. The sold property and its proceeds stand outside, as do family-SCI shares kept on the ordinary income-tax regime (art. 150 UB).

Sources considered: the sections above; these answers condense them. Scope note: each answer inherits the scope note of the section it comes from.

Reviewed as at 11 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 1989 Venice convention as amended by the exchanges of letters of 1998 and 2000, and the 1990 Rome succession and gift convention. The lead watch item is Italy’s multilateral instrument: signed on 7 June 2017 and still not deposited, so a deposit would bring the principal-purpose test and the 365-day property-rich clause into a convention that today has neither. Then: the annual Loi de finances movements on the wealth tax and transfer duties; communal surcharge votes on the Riviera arc; Italian budget-law movements on the substitute-tax regime, raised to €300,000 for transfers of residence from 1 January 2026; and the vintage of the administration’s commentary, which predates both the current French wealth tax and the Italian regime.

The market, from the register

Seen from Italy, the Riviera’s €3M+ villa market begins at the border and runs west. The Near-Monaco arc — Roquebrune-Cap-Martin, Èze, Beaulieu, Cap-d’Ail, Villefranche and Beausoleil, the communes between the Principality and the Italian frontier — recorded 358 qualified sales for €2,758M across 2014–2025 at a €4.7M median. Saint-Jean-Cap-Ferrat is the coast’s narrowest and most expensive register: 178 sales for €2,375M at a €6.5M median and a €200.0M ceiling. The Saint-Tropez peninsula remains the largest €3M+ register on the coast, at 1,006 sales for €7,049M. The past 36 months alone account for €4,392M 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.

Who owns this coast, in aggregate

The public record describes how the Riviera is held, and this brief reads it in aggregate: the state’s transaction register alongside the public company registers, all of it already published, anonymised in processing, with no individual holding identified. Across 20 Riviera communes, 34% of the ownership positions studied are held from outside France, and Italy accounts for roughly 2% of those. For the nearest of France’s neighbours that is a modest footprint on these particular pockets: the Italian presence on this coast has historically run eastward, toward Menton and the border communes, and the Near-Monaco arc above is where the two markets meet.

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 11 August 2026 read the 1989 Venice convention in its official French presentation together with its protocol END TO END, points 1 to 17, and its exchange of letters; and the 1990 Rome succession and gift convention with its protocol — alongside the consolidated CGI articles cited section by section. That reading is why § 5 and § 1 changed: protocol point 3 names the property-company case for rental income, and protocol point 15 makes an exemption depend on the other state actually taxing the income, neither of which the previous edition used. Italian 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 Italian return of credited tax, 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 11 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–Luxembourg — the convention pair

France–Canada — the convention pair

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