The transmission of rural heritage constitutes a major challenge for the maintenance and development of French agricultural holdings. In this context, the 2025 Finance Act published on February 14, 2025, has considerably strengthened the partial exemption scheme for inheritance and gift taxes applicable to rural property leased under long-term leases. This favorable tax measure aims to facilitate the transmission of agricultural holdings while guaranteeing their sustainability. The changes made to the exemption thresholds and commitment conditions represent a significant step forward for the agricultural sector and the preservation of agricultural land.
Before the reform introduced by the 2025 Finance Act, the General Tax Code (CGI) already provided for a favorable regime for gratuitous transmissions occurring within the framework of a long-term rural lease. This scheme, codified in articles 793 and 793 bis of the CGI, concerned both leased rural property and GFA (Groupement Foncier Agricole) shares.
The tax administration applied a partial exemption from inheritance and gift taxes according to the following terms:
The partial exemption of 75% applies to the value of the transmitted property. For vacant agricultural land, the average price is €6,038/ha (2024 DVF data), which gives an order of magnitude of the taxable base before applying the tax allowance. Our land price observatory allows you to obtain precise data by department for your calculation.
To benefit from this partial exemption, several conditions had to be met:
For GFA shares, the exemption was only applicable to groups whose statutes prohibited direct farming, and the agricultural assets constituting the heritage had to have been leased under a long-term lease or a transferable lease.
Article 70 of the Finance Act for 2025 of February 14, 2025, has considerably raised the application ceilings for the 75% exemption. This increase concerns both rural property leased under long-term leases and GFA shares corresponding to such property.
From now on, the partial exemption scheme applies as follows:
This measure represents a considerable step forward, particularly for transmissions of large agricultural holdings, whose market value frequently exceeds one million euros.
It will notably allow certain wine estates whose vineyard valuation exceeds one million euros per hectare to be able to transmit an estate within the family without being forced to sell it to cover transmission taxes that could represent very high amounts.
The duration of the conservation commitment now determines the level of the exemption. To benefit from the new exceptional ceiling of 20 million euros, donees or heirs must commit to keeping the property for a period of 18 years. This provision aims to guarantee the long-term stability of holdings and to avoid speculative sales.
A government press release dated April 1, 2025, provided details on the application of this scheme resulting from the 2025 Finance Act, particularly concerning the partial DMTG exemption referred to in Article 793 bis of the CGI.
While the Law provides that these new provisions apply
to leases subscribed as from January 1, 2025, the press release provides that the new exemption thresholds can apply to all long-term leases regardless of their signature date.
However, it will be necessary to wait for the adoption of the 2026 Finance Act, which should contain a specific article to be certain.
Let's take the example of a transmission upon death to two children, occurring on January 4, 2026, of an agricultural holding leased under a long-term lease with a total value of €1,600,000. The lease was concluded on February 15, 2025. In the absence of a prior gift, each child's share amounts to €800,000.
In this case, if the heirs commit to keeping the property for 5 years, the exemption will apply as follows:
Conversely, if the heirs commit to keeping the property for 18 years, the 75% exemption will apply to their entire share (€800,000), resulting in a total exemption of €600,000 per child and a taxable fraction reduced to €200,000.
The scheme also applies to agricultural land grouping shares, but not to other types of agricultural companies, in the proportion corresponding to rural property leased under a long-term lease or a transferable lease. To benefit from it, the GFA's statutes must prohibit direct farming, a condition expressly provided for by Article 793 of the CGI.
It should be noted that this partial exemption is cumulative with the allowance applicable in the event of split ownership (usufruct/bare ownership). This possibility of combination opens up interesting perspectives for tax optimization in the transmission of rural heritage.
Furthermore, long-term rural leases also offer other tax advantages, particularly regarding real estate wealth tax (IFI). Indeed, rural property leased under long-term leases benefits from a partial exemption for IFI purposes, under certain conditions.
This reform is part of a global policy to support the transmission of agricultural holdings and the installation of young farmers. By lightening the taxation applicable to gratuitous transfers, the legislator intends to encourage the conservation of agricultural heritage within families and facilitate the takeover of holdings.
The significant increase of the ceiling to 20 million euros for 18-year conservation commitments should notably allow for the preservation of the integrity of large agricultural holdings, which are often fragmented during successions due to the tax burden.
To benefit from this partial exemption, donees or heirs must expressly commit to keeping the property for the required duration (5 or 18 years depending on the desired level of exemption). This commitment must be formalized in the inheritance declaration or the deed of gift.
It is strongly recommended to consult a notary specialized in rural law to ensure compliance with the application conditions of the scheme. Indeed, non-compliance with the conservation commitment leads to the withdrawal of the exemption and the reintegration of the taxes normally due, increased by late interest.
When the donee has the status of lessee of the property leased on a long-term basis, the benefit of the partial exemption is subject to the condition that the lease has been granted to them for at least two years at the time of the gift. This condition of lease seniority is however not required in the event of transmission upon death.
The strengthening of the partial exemption scheme for inheritance and gift taxes on rural property leased under long-term leases constitutes a particularly favorable tax measure for the agricultural world. By substantially raising the application thresholds for the 75% exemption (€600,000 for a 5-year commitment and up to 20 million euros for an 18-year commitment), the 2025 Finance Act encourages the intergenerational transmission of agricultural holdings.
This reform is part of a broader policy of support for the agricultural sector, which also includes favorable schemes for the energy renovation of real estate and specific measures to support the retirement of farmers.
For owners of rural property and GFA shares, it is now essential to anticipate gratuitous transmissions by taking these new provisions into account, in order to optimize the applicable taxation and guarantee the sustainability of family agricultural holdings.
