Inherit a House Tax-Free: Discover the Top Strategy Used by Expert Notaries!

Inheritance taxes often present a major challenge. With complex scales, exemptions, deadlines, and calculations, many families are caught off guard by the substantial costs associated with inheriting assets. In France, these costs can soar to tens of thousands of euros, even for modest estates. Consequently, many parents seek effective ways to pass on their assets to their children without surrendering a major portion to taxes.

In response to these concerns, notaries point to a simple, legal, and highly beneficial method that allows individuals to arrange their succession during their lifetime, avoid double taxation, and in many cases, pass on real estate without a hefty tax bill. This method is based on a clever principle: not transferring the entire asset at once, but rather a portion of it, while still enjoying its benefits. This discreet strategy has long been used in well-planned family transfers.

The mechanism in question is the donation of bare ownership. In practical terms, parents transfer the bare ownership of the property to their children but retain the usufruct, meaning they can continue to live there or collect rent until their death. The tax advantage is significant: the value transferred is not that of the entire property, but just the bare ownership, calculated based on the age of the donors. For instance, at 70 years old, it represents 60% of the property’s value; at 80 years old, 70%. Consider a couple aged 68 with an apartment valued at 400,000 euros. By transferring the bare ownership to their only son, they pass on a value of 280,000 euros, or 70% of the property. With each parent having a 100,000 euro exemption, 200,000 euros are completely tax-free. Thus, taxes would only apply to 80,000 euros, amounting to about 6,400 euros in total—a substantial saving compared to a traditional donation, while still collecting rental income from the property.

Upon the parents’ death, the usufruct automatically expires and the children become full owners, without any additional costs or taxes. Everything has already been settled. This is why notaries advocate for the transfer of bare ownership as the most effective legal path for organizing one’s succession, protecting one’s children, and reducing the tax burden. It’s a straightforward way to plan ahead without losing possession.