How do you gift a property during your lifetime in France?

A notarial deed is mandatory, on pain of nullity

A gift of property must be received by a notaire: Article 931 of the French Civil Code requires the authentic (notarial) form, on pain of nullity, for any lifetime gift. A hand-to-hand gift, accepted for sums of money or movable goods, is impossible for real estate.

The notaire checks the donor's capacity, drafts the deed, assesses any gift tax due, then has the gift registered with the French land registry (service de la publicité foncière), which makes it enforceable against third parties. A gift is in principle irrevocable: it can only be called into question in the cases provided by law (Articles 953 et seq. of the French Civil Code).

The tax side: allowances and the fifteen-year recall rule

French gift tax follows the same allowances and the same scale as inheritance tax: 100,000 € per parent and per child (Article 779 of the French General Tax Code), then the progressive scale of Article 777. Allowances specific to gifts are added, depending on the beneficiary.

Each allowance is restored every fifteen years: gifts made by the same person to the same beneficiary within the previous fifteen years are recalled for tax purposes and reduce the allowance still available (Article 784 of the CGI). Giving early, then spreading transfers over time, allows the allowances to be used several times.

The allowances renewable every fifteen years are as follows: 100,000 € per child and per donor parent (Article 779, I of the CGI); 31,865 € for a grandchild (Article 790 B); 5,310 € for a great-grandchild (Article 790 D); 80,724 € for a spouse or PACS partner (Articles 790 E and 790 F); 15,932 € for a brother or sister (Article 779, IV); 7,967 € for a nephew or niece (Article 779, V).

Simple gift or donation-partage?

A simple gift made to an heir must in principle be brought back into the estate at its value on the day of the division: if the property has gained value, the child who received it may have to compensate their co-heirs (Articles 843 and 860 of the French Civil Code). A donation-partage, a combined gift and division deed received by a notaire, distributes the assets among the children and in principle fixes their values at the date of the deed for the calculation of the reserved shares, provided all the reserved heirs take part and receive a lot (Articles 1075 et seq. and 1078 of the French Civil Code).

It is for this reason the preferred tool for passing on several assets or preventing later disputes between children.

What to anticipate before gifting

• The hereditary reserve: a gift cannot deprive the children of their minimum share (Articles 912 and 913 of the French Civil Code); an excessive gift can be scaled back on death.
• Irrevocability: include protective clauses in the deed, such as a conventional right of return if the recipient dies before the donor (Article 951 of the French Civil Code).
• The option of gifting only the bare ownership while keeping the usufruct, to retain the use of the property and reduce the taxable base (Article 669 of the CGI).
• The costs: the notaire's regulated fees, land registration tax and the real estate security contribution come on top of any gift tax.