Portugal for French family offices

Leaving France narrows one tax and triggers another

A French family weighing a move to Portugal is usually looking at the wrong number.

Two French charges govern the decision and they behave in opposite ways. The IFI is annual, reaches real estate and nothing else, and its base narrows sharply when French tax residency ends. The exit tax under article 167 bis is one-off, reaches securities and company holdings, and it fires on departure.

So leaving France reduces one charge and creates another. Which dominates depends entirely on what the family actually holds — and for a family office, that composition question comes before any discussion of Portuguese property.

The IFI narrows

For a French tax resident, the IFI base is worldwide real estate. A Comporta villa sits in the same base as the Paris apartment, and once combined net value exceeds €1.3 million the scale applies at 0.5% to 1.5%.

For a French non-resident, the base is French-situs real estate only.

The difference is substantial. A family holding a €1.5 million French property alongside €5 million of real estate abroad is assessed, as a non-resident, on the €1.5 million alone. The foreign holdings fall out entirely, as does the whole financial portfolio, which the IFI never reached in the first place.

One correction worth making, because it is the most common error. The IFI does not disappear on departure. French real estate above the €1.3 million net threshold remains assessable regardless of where the family lives, and that includes the portion of SCI, SCPI, and OPCI holdings representing French property.

The exit tax fires

Article 167 bis of the Code général des impôts taxes latent gains on securities at the moment tax domicile moves abroad. No sale is required — the departure itself is treated as a disposal event.

It applies where two conditions are met. The individual must have been French tax resident for at least six of the previous ten years, and must either hold securities with total value above €800,000 or hold at least 50% of a company’s profits.

What it reaches: shares, company holdings, corporate rights, and — expressly — both usufruct and bare ownership where securities have been dismembered.

What it does not reach: real estate held directly, which falls instead under the non-resident capital gains regime, along with cash, life insurance contracts, SICAV shares, and FCP units.

The rate. Sources give the flat tax at 30%, comprising 12.8% income tax and 17.2% social charges, with more recent material citing 31.4% following changes to social charge rates. The current rate should be confirmed with French counsel rather than assumed, and the difference is material on a substantial latent gain.

The composition test

Put the two together and a clear framework emerges.

A family whose wealth is predominantly real estate finds departure strongly favorable. The IFI base collapses to French-situs property only, and the exit tax does not reach directly held property at all. The principal cost is ongoing French taxation of any retained French property — rental income at a minimum of 20%, rising to 30% above roughly €29,579 of net taxable income, and capital gains at 19% plus social charges.

A family whose wealth is predominantly corporate or financial faces the opposite. The IFI was never reaching the portfolio, so departure saves little there, while the exit tax fires on latent gains across company holdings. For a founder with an unrealized gain accumulated over decades, that can be the single largest figure in the entire relocation plan.

A mixed position requires modeling both, and the answer is frequently that the sequence matters more than the destination. A family contemplating both a company sale and a relocation should establish with French counsel which should happen first, because the order changes the outcome.

One favorable detail on social charges. A French family relocating to an EU or EEA state sees social charges on retained French rental income fall from 17.2% to 7.5%. That is a direct annual saving on French property kept after departure, and it has nothing to do with Portuguese taxation.

The SCI question

French families habitually hold real estate through an SCI, and the vehicle behaves differently under each charge. This is where family offices most often assume a single answer and get two.

For IFI purposes, the SCI provides no shelter on departure. The portion of SCI shares representing French-situs property remains in a non-resident’s IFI base. Holding through a heavily indebted SCI reduces the net value of the shares and therefore the base, but anti-abuse provisions limit the deductibility of certain loans — particularly from related parties — and that structuring requires specialist review rather than assumption.

For exit tax purposes, the position is fact-specific and turns on what the SCI actually holds. Published commentary indicates that an SCI whose gross assets are predominantly physical real estate falls outside article 167 bis, governed instead by article 150 UB, while an SCI holding predominantly movable assets, or one subject to corporate tax, falls within scope.

That distinction is technical, it depends on the composition of the vehicle at the relevant date, and the sources available to a non-specialist do not resolve it cleanly. Any family office holding through SCIs and contemplating departure should have each vehicle assessed individually. Two SCIs in the same family structure can produce different answers.

Why Portugal specifically, rather than Dubai

This is the point most relevant to a family office choosing between destinations, and it rarely appears in Portugal-facing material.

The exit tax carries a deferral mechanism, and the terms depend on where you go.

Transfer to an EU or EEA state produces automatic deferral without any requirement to post guarantees. Portugal qualifies.

Transfer outside the EU and EEA requires deferral by express application, with guarantees constituted in favor of the French Treasury. Dubai, Monaco, Switzerland, and the United Kingdom all sit in this category.

For a family with a substantial latent gain, the difference between automatic deferral and posting guarantees against a seven-figure potential liability is a genuine cost and a genuine administrative burden.

The deferred charge is then relieved over time. Published guidance indicates automatic relief after two years for holdings of 50% or more and after five years otherwise, with the deferred tax becoming payable if the securities are sold during the deferral period, and full relief if the individual returns to France without having sold. Specific periods and conditions should be confirmed with counsel.

Portugal is not the only EU option. But against the Gulf and Swiss destinations that compete for the same families, the EU deferral position is a concrete advantage that has nothing to do with Portuguese tax rates.

What Portugal offers, and what it costs

No general wealth tax. AIMI applies only to Portuguese residential property and building land above €600,000 per person, or €1.2 million for a married couple, at 0.7% to 1.5% — assessed on tax-assessed value rather than market value, which for prime property is typically a fraction of what was paid. Portfolios, business holdings, and other assets fall entirely outside.

For a family leaving the IFI, that is the structural point: France taxed the property and left the portfolio alone. Portugal does close to the opposite, and on a much narrower base.

No inheritance tax. Transfers to a spouse, descendants, and ascendants are exempt from the stamp duty otherwise applying to gratuitous transfers. France taxes direct-line succession on a progressive scale reaching 45% at the margin.

And the cost, stated plainly. Portuguese tax residency brings worldwide income into the Portuguese net at progressive rates reaching 48% with a solidarity surcharge above €80,000. The IFICI regime that replaced NHR requires a qualifying degree at EQF level 6 or above and a designated high-skilled activity performed in Portugal, and excludes pension income entirely. Most family office principals will not qualify.

Portuguese residents are also taxed on 50% of capital gains on property wherever situated, including French property.

Portugal is a low-carry, nil-succession jurisdiction. It is not a low-income-tax one, and any adviser presenting it otherwise should be asked to show the arithmetic.

Succession

France and Portugal both apply forced heirship — the réserve héréditaire and the legítima respectively — and both sit within the EU Succession Regulation.

The Regulation permits an election for the law of your nationality to govern the entire estate. For a French family that election points to French succession law, which for many families is the intended outcome and preserves planning already in place.

Two qualifications. The election must be made expressly in a valid disposition of property upon death — a standard Portuguese notarial will does not achieve it. And French dismemberment arrangements, where usufruct and bare ownership have been separated, interact with Portuguese property in ways that require review by counsel in both jurisdictions rather than assumption.

Sequencing

Establish the composition first. Real estate or securities, and in what proportion. That determines whether departure is favorable or expensive before any destination is considered.

Model the exit tax with French counsel, including each SCI assessed individually, before any commitment elsewhere.

Establish the order of operations where a company sale and a relocation are both contemplated. The sequence changes the outcome.

Confirm the IFI position both ways, including the deductibility of acquisition debt and the treatment of retained French property.

Confirm the treaty treatment of each income stream under the 1971 convention as amended, noting that it applies the effective rate method rather than a tax credit.

Then address the Portuguese allocation, with the succession election drafted properly at acquisition rather than later.

How Luznur Capital works with French family offices

Luznur Capital, a trading name of Lusomena Investments, Unipessoal Lda., is a real estate brokerage and advisory firm licensed by IMPIC under AMI 22354 and a registered member of APEMIP.

The Portuguese leg of a French-led plan. The binding constraints here are French ones. The firm executes the Portuguese component — acquisition, structure, succession documentation — alongside the family’s existing French counsel rather than in place of it.

Sequencing the residency question before the property one. Whether the family will be Portuguese tax resident determines the acquisition rate, the income position, and in some cases the region.

Off-market access. In prime Lisbon, Cascais, Comporta, and the Algarve, a meaningful share of the better property never reaches a portal. French families are already established in Comporta and along the Alentejo coast, and sourcing against a defined brief produces a different shortlist than a public search.

Beyond residential. Where the requirement is income-producing or development capital rather than a house — a hotel, retail or logistics asset, a mixed-use portfolio, or joint venture equity in a residential scheme — the sourcing, underwriting, and counterparty work differs substantially from a private purchase, and the market absorbs considerably larger tickets.

Honest counsel on fit. For a family optimizing purely on income taxation, Italy’s flat tax or a Swiss lump-sum arrangement might be better, and that is the advice where it applies.

FURTHER READING

Portugal for French buyers and investors — the individual-level version: how the IFI treats a Portuguese property while you remain French resident, and the social charges point.

Is €5 million enough for Portuguese real estate? — what a defined allocation actually buys in a market where the average commercial ticket is under €31 million.

Family Offices & Private Capital — how mandates at this level are structured and what the firm does and does not do.

Golden Visa Comparison 2026: Portugal vs Europe & UAE — relevant where residency forms part of the plan, and for the Gulf comparison.

FAQ

Does the IFI stop when I leave France?
No, it narrows. A French tax resident is assessed on worldwide real estate above €1.3 million net. A non-resident is assessed on French-situs real estate only — including the portion of SCI, SCPI, and OPCI holdings representing French property. Foreign property and the entire financial portfolio fall outside.

What is the French exit tax?
Article 167 bis of the Code général des impôts taxes latent gains on securities when tax domicile transfers abroad, without any sale taking place. It applies where the individual was French tax resident for at least six of the previous ten years and either holds securities above €800,000 or at least 50% of a company’s profits.

Does the exit tax apply to real estate?
Not to real estate held directly, which falls under the non-resident capital gains regime instead. Cash, life insurance contracts, SICAV shares, and FCP units are also outside scope. Shares, company holdings, and corporate rights are within it, including where usufruct and bare ownership have been separated.

Are SCI shares caught by the exit tax?
It depends on what the SCI holds. Published commentary indicates that an SCI whose gross assets are predominantly physical real estate falls outside article 167 bis, governed instead by article 150 UB, while one holding predominantly movable assets or subject to corporate tax falls within scope. The position is fact-specific and each vehicle should be assessed individually.

Is there a deferral on the exit tax?
Yes, and the terms depend on destination. Transfer to an EU or EEA state produces automatic deferral without any requirement to post guarantees. Transfer outside the EU and EEA requires deferral by express application with guarantees constituted in favor of the French Treasury. Portugal is in the EU; Dubai, Monaco, Switzerland, and the United Kingdom are not.

How long until the deferred exit tax is relieved?
Published guidance indicates automatic relief after two years for holdings of 50% or more and after five years otherwise, with the deferred charge becoming payable if the securities are sold during the deferral period, and full relief if the individual returns to France without having sold. Specific periods and conditions should be confirmed with French counsel.

Does Portugal have a wealth tax?
No general wealth tax. AIMI applies only to Portuguese residential property and building land above €600,000 per person, or €1.2 million for a married couple, at 0.7% to 1.5%, assessed on tax-assessed value rather than market value. Portfolios, business holdings, and other assets fall entirely outside it.

What happens to social charges on French rental income after relocating?
They fall from 17.2% to 7.5% for residents of an EU or EEA state. That is a direct annual saving on any French property retained after departure, independent of Portuguese taxation.

Is Portugal a low-tax destination for a family office principal?
Not on income. Portuguese tax residency brings worldwide income into the Portuguese net at progressive rates reaching 48% with a solidarity surcharge above €80,000, and the IFICI regime requires a qualifying degree and a designated high-skilled activity, excluding pension income entirely. Portugal’s advantages lie in the absence of wealth tax and in nil direct-line succession, not in income taxation.

Can French succession law govern my Portuguese property?
Potentially. The EU Succession Regulation permits an election for the law of your nationality to govern the entire estate, which for a French national points to French succession law. The election must be made expressly in a valid disposition — a standard Portuguese notarial will does not achieve it — and existing dismemberment arrangements require review in both jurisdictions.

Is this article tax or legal advice?
No. It presents general information as of October 2026 on French and Portuguese provisions, both complex and subject to change, and several points raised here are fact-specific and unresolved on publicly available sources. Qualified advice is required in both jurisdictions.

DISCLAIMER

Important information

This article is provided for general information only and reflects publicly available information as of October 2026. It does not constitute tax, legal, investment, or financial advice in any jurisdiction.

French provisions referenced, including the impôt sur la fortune immobilière and article 167 bis of the Code général des impôts, are summarized at a general level and necessarily omit conditions, thresholds, exemptions, reliefs, deferral mechanics, and declarative obligations. Published sources differ on the current combined rate applicable to exit tax charges and on the treatment of SCI holdings, which is fact-specific and depends on the composition of each vehicle. Nothing here should be relied upon as a statement of the position applying to any individual, entity, or holding structure, and the current position must be confirmed with qualified French counsel before any commitment.

Portuguese provisions referenced, including the IFICI regime and Decree-Law No. 97/2026, are subject to amendment, and Portugal has revised rules affecting foreign residents repeatedly since 2023. Tax outcomes depend on individual circumstances including residence, income composition, asset structure, and the specific article of the France-Portugal convention of 1971, as amended, applicable to a given source of income.

Property market figures derive from published indices and market reporting using differing methodologies and are indicative of relative position rather than valuations. Real estate investment and development involve substantial risk including illiquidity, entitlement failure, cost overrun, counterparty default, and loss of capital.

Luznur Capital is a trading name of Lusomena Investments, Unipessoal Lda., a real estate brokerage and advisory firm licensed by IMPIC under AMI 22354 and a registered member of APEMIP. It is not a law firm or tax practice, and does not advise on French law. Independent professional advice must be obtained in both jurisdictions before any acquisition, structuring, or relocation decision.

General information as of October 2026, not tax or legal advice. French exit tax and IFI treatment is fact-specific — published sources differ on current rates and on SCI treatment, and each holding structure requires individual assessment by qualified French counsel. Luznur Capital (Lusomena Investments, Unipessoal Lda., AMI 22354).

Planning the Portuguese component

What the family holds determines whether departure is favorable or expensive, and that question is settled in France before anything is viewed in Portugal.

Luznur Capital, a trading name of Lusomena Investments, Unipessoal Lda. (AMI 22354), advises international buyers and investors across Lisbon, Cascais, Sintra, the Setúbal peninsula, Comporta and the Alentejo, the Algarve including Quinta do Lago and Tavira, the Silver Coast, Porto and Braga, the Douro and the Minho, and Madeira, including off-market opportunities, with coordinated legal, tax, and immigration partners — and on mandates of any size in any region of mainland Portugal and the islands.

To discuss a specific mandate, contact info@luznurcapital.com.