Inheriting or bequeathing real estate in France

Many property owners confuse two fundamentally different things. Inheritance law governs who inherits how much. Inheritance tax, on the other hand, determines how much the heirs must pay to the state. For French real estate, different rules apply to these two areas. While inheritance law can be German or foreign law, inheritance tax on properties in France is always calculated according to French tax law. This distinction is crucial for your planning.

The EU rule brought about a revolution in 2015.

Since August 2015, the legal situation has fundamentally changed. The European Succession Regulation introduced a simple principle: the inheritance law of the country in which the deceased last had their habitual residence applies. Specifically, this means that if a German couple lives in Munich and owns a holiday home in Cannes, the French property will be inherited according to German inheritance law – not French.

That used to be different. Until 2015, real estate was automatically subject to the law of the country in which it was located.

They have the right to vote.

The EU regulation offers you an additional important option: In your will, you can specify which law should apply to your estate. You can choose between the law of your country of residence or the law of your nationality. As a German citizen residing in France, you could therefore stipulate that German law should apply – and vice versa. The only important thing is that this choice of law must be explicitly stated in your will.

Mandatory portions: In France, children have ironclad rights.

The biggest difference between French and German inheritance law concerns children. In France, you practically cannot disinherit your children. They have a mandatory legal right to a minimum share of the estate – the so-called "réserve héréditaire." For one child, this protected share is half of the estate, for two children two-thirds, and for three or more children even three-quarters. Only the remaining portion can be freely distributed by will.

German inheritance law offers you significantly more freedom. You can disinherit your children in your will. While they retain a right to a compulsory share, this is only a monetary claim against the heirs and not a direct right to the estate itself. Furthermore, under German law, you can, for example, limit your children to their compulsory share and appoint your spouse as sole heir – an arrangement that is not possible under French law.

The Berlin Testament does not work in France

Many German married couples draw up a so-called Berlin Testament. In this type of will, the spouses appoint each other as sole heirs, and only after the death of the second spouse do the children inherit. However, this joint will is invalid under French law. France only recognizes individual wills. Furthermore, inheritance contracts, as permitted under German law, are not recognized under French law.

Special rules for unmarried people

If you live with your partner without being married, you should pay attention. In France, unmarried partners have no legal right to inheritance – regardless of how long you have been living together. Without a will, your partner inherits nothing! And even with a will, they are treated like a stranger for tax purposes, which means extremely high tax rates. The solution is PACS – the "Pacte civil de solidarité," the French form of civil partnership. With a PACS, you are treated equally to your spouse for tax purposes and can inherit completely tax-free. Same-sex couples can also enter into a PACS. A PACS can be easily established at a French town hall or notary's office.

Now we come to the crucial point that many misunderstand. Even though German law applies to inheritance matters, inheritance tax on French real estate is always calculated according to French tax law! The reason is the so-called situs principle: real estate is taxed where it is located. The Franco-German double taxation agreement of 2006 ensures that you do not have to pay twice.

Tax allowances: Significantly lower than in Germany

French inheritance tax allowances are significantly lower than German ones. As a child, you can only inherit €100,000 tax-free in France, while in Germany the allowance is €400,000. For siblings, the allowance is only €15,932, and for nieces and nephews, it's €7,967. The difference is particularly drastic for unrelated individuals: they have an allowance of only €1,594. However, there is one major exception: spouses and partners in a civil partnership (PACS) are completely exempt from inheritance tax in France. They pay no tax at all, regardless of the value of the inheritance. In Germany, by contrast, the allowance for spouses is €500,000 – after which inheritances are taxed.

Tax rates increase progressively

French inheritance tax is calculated in tiers, similar to income tax. For children, the tax rate starts at five percent for the first €8,072 and rises to 45 percent for amounts exceeding €1.8 million. Siblings pay 35 percent up to €24,430 and 45 percent for amounts above that. Unrelated individuals are taxed at up to 60 percent – a considerable burden.

A numerical example for clarification.

Let's assume you bequeath a house on the French Riviera worth €1 million to two children. Each child inherits €500,000. After deducting the respective tax-free allowance of €100,000, €400,000 remains taxable per child – that's approximately €92,000 in inheritance tax per child, totaling €184,000.

Variant with SCI and gifts:

If you had contributed the property to a social security institution (SCI) and gradually gifted shares over the years, the calculation would look very different. Every 15 years, you can gift each child shares worth €100,000 tax-free. The crucial advantage: only the value at the time of the gift counts. If the house later increases in value, the shares already transferred will not be subject to additional taxation.

With three gifts over 45 years and an assumed doubling of value to 2 million euros, several hundred thousand euros in inheritance tax could be saved.



Important: This is only a simplified example. The actual tax effects depend on many individual factors. An SCI also entails ongoing costs and obligations. It is essential to seek advice from specialized tax advisors and lawyers who can analyze your specific situation.

A tax break is available for the deceased's primary residence. The property's value is reduced by 20 percent before inheritance tax is calculated. However, this only applies if a direct relative – a child, spouse, or PACS partner – actually lived there.

Another special feature is the division into usufruct and bare ownership. The usufructuary has the right to use the property and receive rental income, while the bare owner has legal title but cannot use it. This division plays a role in inheritance tax because the value of usufruct and bare ownership depends on the usufructuary's age. The older the usufructuary, the more valuable the bare ownership becomes – because there is a higher probability that the usufructuary will die soon and full ownership will pass to the bare owner.

If you inherit a French property or if there is a will, you are required to engage a French notary. In France, the notary performs significantly more tasks than in Germany. They determine who the heirs are and the size of their shares, appraise the property, prepare the inheritance tax return, and ensure that the ownership is transferred to the heirs in the French land registry.

We strongly recommend that you choose a German-speaking notary or a notary with experience in German-French inheritance cases. This will make communication considerably easier, and you will understand exactly what is happening. At HEXAGON Real Estate, we would be happy to put you in touch with suitable notaries.

You will need these documents

The notary will need various documents from you. These include the death certificate, the family register or marriage certificate, any wills, and – if applicable – a prenuptial agreement. All these documents must be translated into French by a sworn translator. The French notary will also check the French register of wills to see if the deceased left a French will.

Deadlines are sacred.

The inheritance tax return must be filed with the French tax authorities within specific time limits. If the deceased was resident in France, the deadline is six months from the date of death. If the deceased lived abroad, the deadline is extended to twelve months. Failure to meet these deadlines can result in substantial late payment surcharges and penalties. The appointed notary will usually ensure timely filing – however, you should contact them as soon as possible after the death.

The costs of estate administration

The services of a French notary are not free. Notary fees are based on the property's value and are legally regulated. Additional costs arise for the land registry check, registration in the land register, and any necessary translations. These costs are typically deducted from the estate and thus shared by the heirs.

"I am German, so German law applies to everything."

That's the most common misconception. The truth is: German inheritance law can apply and then determines who inherits what. However, you still have to pay French inheritance tax on the property – and that is calculated according to French tax law. The two legal systems must be considered completely separately.

"We're making a Berlin Testament, it's valid everywhere."

A German joint will (Berliner Testament) can be problematic if French inheritance law applies. Under French law, a joint will made by spouses is invalid. If you are unsure which law will apply, you should definitely seek professional advice before drawing up a will.

"We have lived together for 20 years, my partner inherits automatically"

In France, this is a dangerous misconception. Without marriage or a PACS (Partnership Agreement for Personal Acquisition and Support), your partner has no legal right to inherit. Even if you include them in your will, they will be treated as a stranger for tax purposes and will pay up to 60 percent inheritance tax. A PACS can completely resolve these issues.

"We'll sort out the inheritance later, we have time."

The earlier you plan, the more you can save. Gift tax allowances are renewed every 15 years. By starting to transfer assets early, you can utilize these allowances multiple times. Furthermore, you avoid a situation where your heirs have to make critical financial decisions under time pressure in the event of your death.

If you own a French property

Draw up a will and make a conscious choice of law within it. Consider whether French or German inheritance law is better suited to your family situation. If you live with a partner without being married, you should definitely consider marriage or a PACS (Parliamentary Agreement for Partnerships). Find out about lifetime gifting options to make the best use of tax-free allowances. Contact a German-speaking notary in France in good time so that you have a point of contact in case of emergency.



If you have just inherited something

Engage a French notary promptly to ensure that the inheritance tax return deadlines are met. Have all necessary documents translated into French by a certified translator. If you have any doubts about the property's valuation provided by the notary, you can commission your own appraisal. Discuss with any co-heirs how you intend to handle the property – whether to keep it, rent it out, or sell it. Seek tax advice, especially if you plan to sell the property, as this may incur additional French taxes.

French inheritance law and inheritance tax are complex, but manageable with proper preparation. The most important point is understanding the difference between inheritance law and inheritance tax. Inheritance law determines who inherits – and here you can influence this through skillful will drafting and choice of law. However, inheritance tax on French real estate always follows French tax law, regardless of which inheritance law applies.

French tax allowances are significantly lower than German ones, and tax rates can be very high – especially for more distant relatives or unrelated individuals. However, there are legal ways to considerably reduce the tax burden: through marriage or PACS (Private Accounts Consolidated Financial Services), lifetime gifts, or the skillful use of usufruct arrangements.

Seek early advice from experts familiar with both German and French law. Sound estate planning can save your heirs thousands of euros in taxes and prevent legal complications after your death. At HEXAGON Real Estate, we not only assist our clients with buying and selling properties on the French Riviera, but also connect them with specialized German-speaking lawyers, notaries, and tax advisors in France who can support you with estate planning and probate.

Legal notice: This article is for general information purposes only and does not replace individual legal or tax advice. The information is correct as of November 2025. For binding information relating to your personal situation, please consult a specialized lawyer or tax advisor.