As of 15th February, financial gifts made between certain family members for the purchase of a new home or for energy renovation work are now exempt from gift tax under specific conditions. This follows the enactment of the 2025 Finance Act, which introduced this as a temporary, time-limited exemption scheme that will remain in effect until the end of 2026. Here’s more on how it works.

Under normal circumstances, monetary gifts are subject to taxation unless they fall under certain exceptions, such as birthday or wedding gifts. However, new provisions now allow tax-free financial gifts from family members, provided the money is used for property acquisition or energy-efficient home improvements.

Eligible donors include parents, grandparents, great-grandparents, and aunts and uncles with no direct descendants. The exemption applies to donations made for the purchase of a new home, a property in the process of completion, or for energy renovation work on a primary residence. The renovations must qualify for MaPrimeRénov’, a government scheme supporting energy efficiency improvements.

HOW IT WORKS

To benefit from this exemption, the recipient must utilise the funds within six months of receipt. The tax-free amount is capped at €100,000 per donor, with an overall limit of €300,000 per beneficiary for real estate projects. For example, a person could receive €100,000 from their grandfather and €100,000 from their mother, both exempt from taxation, to finance the purchase of a home.

This exemption scheme will remain in effect until 31st December 2026. A similar initiative, which ended on 30th June 2021, allowed tax-free donations of up to €100,000 for home construction or energy renovations by direct descendants.

It is important to note that if the exempted funds are used to purchase a home, the recipient must either reside in it as their main home or rent it out as a primary residence for at least five years. Renting to a member of one’s tax household is not permitted under this scheme.

For more information, click here.

Read related:

Explained: France’s taxe d’aménagement for building works and renovations

Monaco Life is produced by real multi-media journalists writing original content. See more in our free newsletter, follow our Podcasts on Spotify, and check us out on Threads,  Facebook,  Instagram,  LinkedIn and Tik Tok.  

Photo credit: Andrea Piacquadio, Pexels