“Unproductive Wealth” in French: What Will Really Change for Owners and the Budget

France is once again debating the fairness of taxing wealth — but there’s no revolution. At the end of October 2025, the National Assembly approved at first reading the transformation of the existing real estate wealth tax for the wealthy (IFI) into a “tax on unproductive wealth.” At the same time, lawmakers rejected the left’s proposed “wealth floor for the ultra-rich” (the so-called “Zucman tax” on fortunes above €100 million). What does this mean for “paper millionaires,” the budget, and the investment climate? Let’s break it down calmly, figure by figure.

What Was Actually Adopted: IFI Evolution Instead of a “Tax Revolution”

As Le Monde notes, the essence of the amendments is to broaden the IFI base to include some “unproductive” assets while simultaneously easing the rate for the very wealthy. This is a fine-tuning of the current system, not its dismantling. A rare political coalition formed around the decision: parts of the centrists (MoDem), Socialists, and RN deputies backed the changes at first reading. The result is a narrow majority and a long road ahead: the amendments still need to pass the Senate, go through joint committees, and likely face Constitutional Council review. It will be at least several months before any final entry into force.

Why the “Zucman Tax” Failed — and How It Differed

Economist Gabriel Zucman’s idea envisioned a minimum annual payment of 2% of net wealth for households with assets above €100 million. Unlike the IFI (which targets real estate starting at €1.3 million), this “floor” would cover all assets, including business equity, and would effectively address the regressivity at the very top of the income distribution. Supporters estimated revenues of up to €20–25 billion per year; skeptics projected closer to €5 billion, factoring in optimization and capital flight. The political majority chose a “step-by-step” option — adjusting the IFI rather than inserting a new universal tax.

Who Will Be Affected by “Unproductive Wealth”

The primary candidates are owners of large property portfolios, land, and passive assets outside entrepreneurial activity. In political logic, this is “passive accumulation” that doesn’t create jobs or value added. At the same time, some high-value assets tied to operating businesses may still remain in a “protected zone.” Hence the critics’ main point: the burden will fall not on the “ultra-rich,” but on “paper” millionaires with high asset values but limited cash flow.

Fairness vs. Competitiveness: Two Sides of One Debate

Proponents argue that the top 0.1% pay less in relative terms than average households — a distortion that must be corrected. Opponents respond in kind: penalizing “paper” capital means hurting investment and nudging the wealthy toward relocation or complex optimization. As usual, the truth lies somewhere in between. International evidence shows that “tax flight” exists but is contained; more dangerous is regulatory unpredictability. Markets watch not just rates, but the stability of the regime over a 3–5-year horizon.

Scenarios for the Budget and the Market

— Budget revenue. In the short term, the effect of “tuning the IFI” will be modest and highly dependent on valuation methods and the list of exemptions. This is not a deficit plug, but an extra trickle into the overall stream.
— Real estate market. Pressure will rise on “stone” assets with high carrying costs. Optimizations are likely: shifting some assets into “productive” categories, restructuring ownership, sale-and-leaseback deals.
— Investment climate. The key risk is not the rate, but the “noise”: frequent rule rewrites raise the risk premium. The clearer the criteria for “unproductiveness,” the softer the investor reaction.

What Owners Should Expect: A Practical Logic

Asset inventory. Break your portfolio into “productive” and “passive” components: where there is operating activity, employment, taxes, investments.

Liquidity assessment. Taxes are paid in cash, not “bricks.” Review cash flow, credit lines, and reserves for tax payments.

Structuring. Check the ownership form and tax regime of each “cell” — sometimes structural tweaks reduce risks without aggressive optimization.

Planning horizon. Build several scenarios through 2027: base (soft adjustment), strict (broader base), and neutral (rollback in the Senate/Constitutional Council).

Where the Pinch Points Are: Constitutionality and Administration

As experts at International Investment note, even the “soft” version will inevitably face tests of equality before the law and proportionality. Fine calibration matters: what exactly counts as “unproductive,” how to treat family businesses, stakes in operating companies, farmland, and cultural heritage. Collection efficiency and the reform’s social legitimacy will hinge on administrative quality.

Bottom Line: A Small Step with Long Consequences

Once again, France chose evolution over revolution. As experts at International Investment remind us, the “tax on unproductive wealth” is not an ideological hammer but a screwdriver: tighten the base, ease the top rate, don’t scare off capital. But the main thing — trust — depends on how transparently “unproductiveness” is defined and how stable the rules remain. For owners, this is a time for calculation, not emotion: inventory, liquidity, structure, scenarios. For the state, it’s a time for calm and predictability: these add percentage points to investment and billions to the budget more effectively than any slogan.