French Tontine – Tontine in France
The “tontine” or “accroissement” is a legal mechanism used when property is purchased jointly by two or more individuals, ensuring that upon the death of any purchaser, the property automatically passes to the surviving co-owners.
Civil Law Aspect:
- The “tontine” clause operates retroactively upon purchase, so upon the death of the first owner, it is as if the survivor(s) were always the sole owner(s).
- This mechanism avoids falling under French inheritance law rules, including forced heirship rules.
- Disagreements between joint owners, such as during divorce, cannot compel either party to dispose of or deal with the property.
Tax Law Aspect:
- Property transfer tax is paid upon purchase as usual.
- Upon the death of the first owner, the transfer of their share to the survivor is subject to inheritance tax, except in specific circumstances.
- An exception applies when the property is the shared principal residence and valued below €76,000 at the time of the first death, where transfer to the survivor is subject to property transfer tax or standard inheritance tax rates, depending on the survivor’s choice.
For detailed information on inheritance tax rates, the relationship between the deceased and the beneficiary, refer to our article on taxation in French inheritance law.