France–Japan — 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–Japan convention — 1995, income only

The relationship rests on a single instrument. The convention of 3 March 1995, signed at Paris, replaced the 1964 text and entered into force on 24 March 1996, its provisions applying from 1 January 1997; the avenant of 11 January 2007, in force since 1 December 2007, modernised it and added a detailed entitlement article reserving certain treaty benefits to qualified persons — individuals qualifying as such (article 22A). The multilateral instrument, signed by both states on 7 June 2017, entered into force for France and for Japan on the same day, 1 January 2019, on the basis of notifications lodged on 26 September 2018: it added the principal-purpose test, under which a treaty advantage can be refused where obtaining it was a principal object of an arrangement, and rewrote the property-rich gains clause examined in section II. The convention covers taxes on income — on the French side the income tax, the corporation tax and, notably, the CSG and CRDS are listed by name; on the Japanese side the income tax, the corporation tax and the local inhabitant taxes. It does not cover taxes on wealth, and the administration's treaty list of 29 April 2026 records no succession or gift convention with Japan — 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.

Residence does the sorting. A person within the tax of both states is assigned by the tie-breakers of article 4 §2, on the OECD cascade: permanent home, then centre of vital interests, then habitual abode, then nationality, then mutual agreement. French domestic law reaches the same question through CGI article 4 B — the family's foyer, the principal place of stay, the centres of professional and economic interest — and the treaty settles the conflicts the two systems produce.

The Japanese side keeps its own accents. Japan taxes inheritances and gifts in the hands of the recipient rather than of the estate, by reference to the heir's or donee's residence and nationality, at progressive rates reaching 55%, and applies residence rules of its own to foreign nationals, turning in part on ten years' presence within the preceding fifteen. It levies no net-wealth tax. This brief states Japanese law at orientation level only; its verified ground is the French side and the 1995 convention, and the Japanese reading belongs with the family's advisers in Tokyo.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 1995 convention (CML consolidation) preamble, arts. 2, 4, 22A; BOI-ANNX-000306 (29 April 2026); BOI-INT-CVB-JPN (2012 vintage — the text prevails)

2The market seen from Japan

Seen from Japan, 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.

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 Japan 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 Japanese buyers typically retain their own advisers in addition. Because no treaty governs what happens to the villa at death or by gift, 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 965, 2°). Here the treaty position is simply absent rather than settled: the 1995 convention covers income alone, so no article allocates or tempers the charge — the same footing as the Denmark and Brazil relationships, and the opposite of the Germany one, whose 1959 text covers wealth expressly. Japan levies no net-wealth tax of its own, so the IFI is a French cost of carry rather than a double charge, yet it stands on domestic law alone and follows the property whatever the owner's treaty residence.

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; 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 Japanese buyer the analysis carries one organising fact: with no succession or gift convention, whatever the deed creates will be read by each state under its own law, with no treaty to arbitrate between 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.

What the acquisition decides for succession — and for gifts

This is the section the absence of a treaty writes. 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. Japan, for its part, taxes the Japan-resident heir or donee on what is received — worldwide where the heir is within the full reach of Japanese law, at rates reaching 55%, stated here at orientation. Nothing coordinates the two assessments. France's credit mechanism, article 784 A, operates only in the worldwide cases of 750 ter 1° and 3°, and even there credits foreign duty solely against the tax on foreign-situs assets — by its terms it never relieves the French villa itself. Japan's unilateral foreign-tax credit may absorb part of the French charge on the Japanese side, a question of Japanese law examined with Tokyo counsel. The one instrument that does speak is European: under Regulation 650/2012, which France applies to all successions, a Japanese national habitually resident in France may elect Japanese law for the succession as a whole.

The election meets French forced heirship on settled terms. Japanese law protects children through a reserve of its own — the iryūbun, a monetary claim against the estate rather than a share in kind, stated here at orientation — and the compensatory levy French law added in 2021 arises only where the foreign law applicable to the succession permits no protective reserve mechanism at all (Code civil, art. 913, al. 3), alongside its condition that the deceased or a child be an EU national or resident. A reserve-type system on the Japanese model is therefore unlikely to trigger it, though the point is assessed on the succession's actual facts. 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 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 Japanese family the treaty setting is sparser than in most relationships: the gift falls within no convention, France taxes it as the situs state on the French scale, and any Japanese charge on the donee follows Japanese law alone, with such relief as Japanese law itself provides. 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, 750 ter, 751, 777, 779, 784 A, 968, 973–974, 990 J, 1649 AB; Code civil art. 913; EU Reg. 650/2012; 1995 convention arts. 13, 23 §2

IISelling as a Japan resident

France taxes first, as the state where the property stands: article 13 §1 assigns gains on French immovables to France, and paragraph 3 of the same article — rewritten by the multilateral instrument — reaches gains on shares and comparable interests, partnership and trust interests included, that drew more than half their value from French real estate at any time in the 365 days before the sale. For a Japan-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 Japan-resident seller does not hold, whatever bilateral arrangements exist between the two states' pension systems. Notably, the 1995 convention lists the CSG and CRDS among the French taxes it covers, so these levies enter the treaty's credit machinery as French tax; how far Japan's credit absorbs them is a question of Japanese law, examined at engagement. 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.

Japan then answers as the residence state. The convention leaves the situs allocation non-exclusive: Japan taxes the gain under its own law and credits the French charge against its own, within the limit of the Japanese tax on that income (article 23 §2 a). 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 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · 1995 convention arts. 2, 13 §§1, 3, 23 §2; CGI arts. 150 UB, 150 VC, 167 bis, 200 B, 235 ter, 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 convention then decide which state prevails. 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 convention assigns the income to France as the situs state, whatever the form of exploitation (article 6 §§1 and 3), and leaves the allocation non-exclusive: Japan taxes its resident on the same income under its own law and credits the French tax (article 23 §2 a), the mechanics of that credit — the CSG and CRDS included, both being taxes the convention covers — belonging with the family's advisers in Tokyo.

Law reviewed as at 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus · CGI arts. 4 B, 197 A, 235 ter; 1995 convention arts. 4 §2, 6, 23 §2

4What changed

Edition 1 — baseline (July 2026). The instruments as they stand: the convention of 3 March 1995 as amended by the avenant of 11 January 2007 and modified by the multilateral instrument, in force for France and for Japan alike since 1 January 2019 on notifications lodged on 26 September 2018. No succession or gift convention exists, and none is recorded as under negotiation; this brief will track any announcement, since a first France–Japan succession instrument would rewrite section I bis entirely. The administration's commentary on the convention (BOI-INT-CVB-JPN) dates from September 2012 — after the 2007 avenant, 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; Japanese legislation on inheritance and gift taxation, whose residence rules for foreign nationals have moved repeatedly in recent reforms; and any refresh of the 2012 commentary. 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 Japan 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 1995 convention covers income alone, so no treaty article allocates or tempers the charge — the position already familiar from the Denmark and Brazil relationships. Japan levies no comparable net-wealth tax, so the cost is one-sided in practice, but it stands on French domestic law alone.

Which country taxes the succession on a French villa?

Both, and no treaty coordinates them. France taxes the villa as French-situs property, reading through family-held companies (CGI art. 750 ter), at rates reaching 45% in the direct line; Japan taxes its resident heirs on what they inherit, worldwide, at rates reaching 55%. France's credit mechanism (art. 784 A) applies only to foreign duty on foreign-situs assets and never relieves the villa itself; such relief as exists rests on Japan's own unilateral foreign-tax credit, a question of Japanese law.

Are lifetime gifts covered by the France–Japan treaty?

No. The 1995 convention governs income taxes only, and France's treaty list records no succession or gift instrument with Japan. A gift of the villa, or of its bare ownership, bears French gift duty as situs-state taxation, and any Japanese charge on the donee follows Japanese law separately, with such relief as that law itself provides.

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

France first, as the state where the property stands (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. Japan then taxes the same gain under its own law and credits the French charge against its own (art. 23 §2 a). Property-rich company shares follow the same allocation under the 365-day clause the multilateral instrument added.

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 Japan?

Yes — France taxes it first as the situs state (convention, 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. Japan taxes the same income in the resident owner's hands and credits the French tax under article 23 §2 a) of the convention.

Does French forced heirship bind a Japanese family?

Less than is often assumed. Under EU Regulation 650/2012, a Japanese national habitually resident in France may elect Japanese law for the succession as a whole, and Japanese law protects children through a reserve of its own — the iryūbun, a monetary claim against the estate. The compensatory levy of Code civil article 913, al. 3 arises only where the applicable foreign law permits no protective reserve mechanism at all, a condition a reserve-type system on the Japanese model is unlikely to meet; the point is assessed on the succession's actual facts.

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 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, 235 ter, 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 convention of 3 March 1995 in its official French consolidation — the 2007 avenant and the multilateral instrument incorporated, as published by the administration — and the administration's treaty list of 29 April 2026, which records the France–Japan relationship as covering income tax alone. The administration's commentary on the convention (BOI-INT-CVB-JPN) 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. Japanese domestic law — the inheritance and gift taxes, their residence rules and their unilateral credit — 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. Items flagged "at engagement" — communal rates, the Japanese return of 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 19 July 2026 — verified against Légifrance and BOFiP through the Chiron Legal Corpus

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