Farmland, Woodland & Forestry Inheritance Reliefs in France

The reliefs at a glance

French law gives rural land, farmland and forestry a favourable inheritance and gift treatment that ordinary property does not enjoy. Where farmland is let on a long-term lease, or held through shares in an agricultural land group, and where woodland is managed sustainably, only a fraction of the value is taxed when the asset passes on death or by lifetime gift. These are partial exemptions from gift and inheritance duty (droits de mutation à titre gratuit), and each one is granted in return for conditions the heir has to meet and keep meeting for years after the transfer.

There are, in substance, three main reliefs, and they do not work in the same way. Farmland let on a long-term lease (bail rural à long terme) and shares in an agricultural land group (groupement foncier agricole, GFA) are exempt to the extent of 75% of value up to a threshold, and 50% above it (Article 793 bis of the General Tax Code). Woodland and forests (bois et forêts), and shares in a forestry group (groupement forestier), are exempt to the extent of 75% of value with no upper ceiling, but only against a 30-year sustainable-management undertaking (Article 793, 2.2° and Article 793, 1.3°). A separate 75% relief applies to unbuilt land inside a Natura 2000 site (Article 793, 2.7°). Each relief has to be claimed in the deed of gift or the succession declaration, with the supporting documents and undertakings attached, and each can be lost if the conditions are broken.

The distinctions matter to a foreign owner of French rural property more than they might appear. A relief that removes three quarters of the taxable value can be the difference between an heir keeping a farm or a wood and having to sell part of it to pay the duty. But every one of these reliefs comes with a holding period or a management commitment that runs for years — five, ten, eighteen or thirty — and a sale, a gift or a change of use inside that period can trigger a clawback of the tax that was saved, together with interest. This article sets out what each relief covers, the thresholds and conditions, and how the relief is kept or lost.

Farmland on a long-term lease (bail à long terme)

Farmland that is let on a long-term rural lease is partially exempt from gift and inheritance duty when it passes by gift or on death, for as long as the lease and its successive renewals are running (Article 793, 2.3° and Article 793 bis of the General Tax Code). The relief covers rural property (biens ruraux) let on a long-term lease (bail à long terme) or on an assignable lease outside the family framework (bail cessible hors du cadre familial). It is not a relief for the farmer who works the land directly; it is a relief for the owner-landlord who has tied the land up under a long lease, and it is designed to keep let farmland in family hands across the generations.

The relief reaches the full ownership of the land where the landlord passes it on, and it also reaches the bare ownership (nue-propriété) alone — so where the land is held in a split of usufruct and bare ownership, the bare owner can benefit even though it is not that person who has the status of landlord under the lease. The relief applies to each transfer in turn, on death and on gift, as long as the lease is in place at the moment of each transfer.

The conditions on the lease

Three conditions govern the relief, and they are checked at the date of each transfer, not once and for all. First, the long-term lease must be in force at the moment of the transfer, and this must be true at every transfer that claims the relief; it is not enough that the land was let on a long-term lease at the time of the previous transfer if the tenant has since been kept on without a proper long-term rural lease. Second, where the tenant is the person receiving the land (the donee) or a member of that person's family, the lease must have been granted at least two years before the gift — a rule that stops a lease being put in place purely to capture the exemption on an imminent transfer. Third, the person who receives the land must keep it for a set period after the transfer, which is where the holding condition and the threshold interact (see below).

The long-term rural lease itself is a creature of the Rural Code: the leases that qualify are those governed by Articles L. 416-1 to L. 416-6, L. 416-8 and L. 416-9 of the Rural Code, and the assignable lease outside the family framework is the one under Articles L. 418-1 to L. 418-5. These are commitments of at least eighteen years in the case of the classic long-term lease, and it is that long tie on the land, combined with the holding period the heir signs up to, that the exemption rewards. For a landlord planning a transfer, the practical point is that the lease has to be genuine, in place, and — where the tenant is family — seasoned for two years before the gift.

GFA and GAF shares

The same 75%/50% relief is available where farmland is held not directly but through shares in an agricultural land group. When shares in a groupement foncier agricole (GFA) — or a groupement agricole foncier (GAF) — pass by gift or on death, they are partially exempt from gift and inheritance duty for the fraction of their value that represents property let on a long-term lease or on an assignable lease outside the family framework (Article 793, 1.4° and Article 793 bis of the General Tax Code). The exemption follows the land, not the wrapper: only the part of the share value that corresponds to long-let farmland qualifies, and any other property held by the group is taxed under the ordinary rules.

Holding farmland through a GFA is a common way for a family to own and pass on agricultural land while a single tenant farms the whole holding, and the relief is built to support exactly that structure. But it comes with its own set of conditions, layered on top of the conditions for the land itself.

The conditions on the group and the shares

Five conditions have to be satisfied for GFA shares to qualify. The group must meet the characteristics set by Articles L. 322-1 to L. 322-21 and L. 322-23 of the Rural Code. The group's articles must forbid it from farming the land itself (direct owner-farming, faire-valoir direct). All of the agricultural property that makes up the group's assets must be let on a long-term lease under Articles L. 416-1 to L. 416-6, L. 416-8 and L. 416-9 of the Rural Code, or on an assignable lease under Articles L. 418-1 to L. 418-5. The shares must have been held for at least two years by the donor or the deceased — unless they were issued in return for a contribution consisting exclusively of agricultural land or agricultural property rights when the group was formed, in which case the two-year wait does not apply. And the shares received must be kept by the beneficiary for five or ten years from the transfer, the choice of period being recorded in the deed of gift or the succession declaration.

One difference between GFA shares and directly held farmland is worth flagging because it changes the risk of a partial disposal. Where the holding condition is broken for only part of the land held directly, the clawback applies only to the parcels actually sold. For GFA shares the rule is stricter: where the holding condition is broken for only some of the shares, the clawback applies to all the shares the beneficiary received, not just those disposed of. The wrapper that gives the family flexibility in ownership also concentrates the clawback risk. There is, on the other hand, a helpful point from the case law: once GFA shares have been kept for the five years from a gift, converting the GFA into an ordinary property-holding company (SCI) afterwards does not by itself trigger a loss of the relief (Cour de cassation, commercial chamber, 4 February 2004, no. 00-20271).

Woodland and forestry (bois et forêts)

Woodland and forests are exempt from gift and inheritance duty to the extent of 75% of their value, and so are shares in a forestry group, in return for a long commitment to manage the woods sustainably (Article 793, 2.2° and Article 793, 1.3° of the General Tax Code). Unlike the farmland relief, the woodland exemption has no upper threshold — the 75% applies to the whole value — but it is granted only against documents and an undertaking that have to be produced up front and honoured for thirty years.

The two conditions: certificate and 30-year undertaking

The relief must be claimed in the deed of gift or the succession declaration, and it is subject to a double condition. First, a certificate must be produced — issued free of charge by the departmental director of territories (directeur départemental des territoires) — attesting that the woods are capable of presenting one of the guarantees of sustainable management (garanties de gestion durable) set out in Articles L. 124-1, L. 124-2, L. 124-3 and L. 313-2 of the Forestry Code. Second, the deed or declaration must contain an undertaking by the heir, legatee or donee, given for themselves and their successors in title, to apply one of those sustainable-management guarantees to the woods for thirty years. Where no such guarantee is in place at the time of the transfer, the undertaking is instead to present one within three years and apply it until the end of the thirty-year period — and, in the meantime, to apply the normal management regime to the woods until the guarantee is in place.

The commitment is not a one-off filing. Those who benefit from the exemption must send the departmental forestry authority, every ten years, a report on how the sustainable-management documents have been implemented (Article 281 H bis of Annex III to the General Tax Code). The thirty-year undertaking is the price of the 75% exemption, and it runs with the woods.

Shares in a forestry group

Where woodland is held through a forestry group (groupement forestier) rather than directly, the exemption is calculated differently. It is not worked out on the market value of the shares, but on the fraction of the net value of the assets that are in the nature of woods and forests or treated as such. In addition, for shares that were acquired for consideration — bought rather than received on the formation of the group — the exemption applies only if the shares had been held for more than two years by the deceased or the donor (Article 793, 1.3° of the General Tax Code).

Rural land groups and Natura 2000 land

Two related reliefs sit alongside the woodland exemption. Shares in a rural land group (groupement foncier rural) are treated in two parts: the fraction of the shares representing forestry assets follows the rules for forestry-group shares, and the fraction representing agricultural assets follows the rules for GFA shares (Article 848 bis of the General Tax Code). Separately, unbuilt properties that are not in the nature of woods and forests but lie inside a Natura 2000 site are exempt from gift and inheritance duty to the extent of 75% of their value (Article 793, 2.7°), on production of a certificate and an undertaking to apply conservation-compliant management guarantees to the land for eighteen years. The Natura 2000 relief cannot be combined with any other gift-and-inheritance-duty exemption on the same land.

Thresholds and conditions

For farmland on a long-term lease and for GFA shares, the exemption is 75% of value up to a threshold, and 50% of value above it (Article 793 bis of the General Tax Code). The threshold is not fixed at a single figure; it depends on how long the heir undertakes to keep the land. The 75% band runs up to €300,000 per beneficiary where the land is kept for five years from the transfer. It is raised to €500,000 where the beneficiary undertakes to keep the land for ten years instead (loi 2022-1726 of 30 December 2022, Article 24). A beneficiary who wants the higher €500,000 threshold has to say so — the ten-year choice is recorded in the deed of gift or the succession declaration.

Above the applicable threshold, the exemption does not disappear; it drops to 50%. So even a large holding keeps a meaningful relief on the excess. The threshold is assessed per beneficiary and per category of asset: where a transfer includes both directly held long-let farmland and GFA shares, the threshold applies separately to each category, so a different ceiling can apply to each. And prior gifts from the same donor to the same beneficiary in the previous fifteen years are counted in when the threshold is measured, so the ceiling cannot be reset by staggering gifts within that window.

How the calculation works

A worked example from the transfer of a let farm shows how the two bands combine. Take a farm let on a long-term rural lease, worth €600,000, given to a child in 2024. If the child undertakes to keep the land for ten years, the €500,000 threshold applies: the exempt fraction is (€500,000 × 75%) + (€100,000 × 50%) = €375,000 + €50,000 = €425,000, so €175,000 is taxable. If the child keeps the land for only five years, the €300,000 threshold applies: the exempt fraction is (€300,000 × 75%) + (€300,000 × 50%) = €225,000 + €150,000 = €375,000, so €225,000 is taxable. The longer commitment exempts €50,000 more of value on these figures, and the child then also has the ordinary personal allowance and the progressive scale applied on top of the exemption in the usual way.

Woodland and forestry work on a different axis. There the exemption is a flat 75% of value with no threshold, so the size of the holding does not erode the relief, but the price is the thirty-year sustainable-management undertaking rather than a five or ten-year holding period. A family with both let farmland and woodland in the estate is therefore dealing with two different exemption mechanisms at once, and the planning has to keep them apart.

Keeping the relief (the clawback)

Every one of these reliefs can be lost after the event. The exemption is conditional, and breaking the condition — selling the land, giving it away, ending the lease, or dropping the management undertaking inside the committed period — triggers a loss of the relief (déchéance du régime de faveur) and a recovery of the tax that was saved. Understanding what breaks the relief is as important as claiming it in the first place.

Farmland and GFA shares: the holding period

For farmland on a long-term lease and for GFA shares, the relief depends on the beneficiary keeping the asset for the committed period — five years, or ten years where the higher €500,000 threshold was taken. Selling or giving away all or part of the land, or the shares, breaks the condition; so does a transfer of the usufruct or the bare ownership alone, and — for directly held land — contributing the land to a GFA. Loss of the relief means the complement of gift or inheritance duty that would have been due becomes payable, together with late-payment interest under Article 1727 of the General Tax Code, and a bad-faith surcharge under Article 1729 where deliberate default is established.

Two refinements soften the edges. Where the holding condition is broken for only a fraction of directly held land, the clawback is limited to the parcels actually sold (Cour de cassation, commercial chamber, 10 July 2018, no. 16-26083); and where several assets of the same kind each benefited from the exemption, losing the relief on one does not affect the others. For GFA shares the position is harsher: a breach on only some of the shares brings the clawback down on all the shares received. A capital reduction of the GFA that cancels part of the shares and withdraws property from the group's assets also triggers the loss of the relief (Cour de cassation, commercial chamber, 3 November 2004, no. 02-14421). But keeping the shares for the five years and only then converting the GFA into an SCI does not (Cour de cassation, commercial chamber, 4 February 2004, no. 00-20271). Where the €500,000 threshold was taken and the ten-year period is not seen out, the clawback applies to the slice of value above €300,000 that was exempted at 75% instead of 50%.

Woodland: the 30-year management undertaking

For woodland and forestry the relief is lost by breaking the management undertaking rather than by disposing of the land. Where the undertakings given are not honoured, the loss of relief is pronounced, and the consequence is scaled to how far into the thirty years the breach occurs: the complement of duty becomes payable together with a supplementary duty equal to 30%, 20% or 10% of the reduction that had been granted, according to whether the breach is found before the end of the tenth, twentieth or thirtieth year. The earlier the breach, the heavier the additional charge.

Selling the woods does not by itself destroy the relief, because the undertaking runs with the land — but the buyer inherits the commitment. Where woodland that carried a sustainable-management undertaking is sold, and the new owner then fails to honour that undertaking, the original seller's partial exemption is clawed back: the new owner becomes the seller's successor in title for the purpose of the commitment (Cour de cassation, commercial chamber, 11 June 2013, no. 12-19890). Two situations are carved out of the clawback altogether: expropriation, and the transfer of woods by a forestry group to a local authority (Article 1042 of the General Tax Code). And where the breach affects only part of the woods, the recovery is proportionate — measured by the ratio of the area in breach to the total area covered by the undertaking.

Natura 2000 land

The Natura 2000 relief follows the same logic on a shorter clock. The eighteen-year management undertaking, if broken, brings a supplementary duty of 30%, 20% or 10% of the reduction granted, according to whether the breach falls before the end of the tenth, twentieth or thirtieth year, together with late-payment interest (Article 1840 G, II and Article 1727 of the General Tax Code). Here too a breach affecting only part of the land is recovered proportionately to the area concerned.

Frequently asked questions about farmland and forestry inheritance relief

Is farmland exempt from French inheritance tax?

Not fully, but it can be largely exempt. Farmland let on a long-term rural lease (bail à long terme), and shares in an agricultural land group (GFA) to the extent they represent such land, are exempt from gift and inheritance duty to the tune of 75% of value up to a threshold and 50% above it (Article 793 bis of the General Tax Code). The 75% band runs to €300,000 per beneficiary where the land is kept for five years, or €500,000 where the heir undertakes to keep it for ten. Farmland that is not let on a qualifying long-term lease does not get this relief.

What is the GFA relief?

A GFA is a groupement foncier agricole — an agricultural land group used to own farmland collectively, typically while a single tenant farms it. When its shares pass by gift or on death, they are 75%/50% exempt from gift and inheritance duty for the fraction of their value that represents land let on a long-term or assignable lease (Article 793, 1.4° and Article 793 bis of the General Tax Code). The group must forbid direct owner-farming, all its agricultural land must be let on a qualifying lease, the shares must generally have been held for two years, and the beneficiary must keep the shares for five or ten years.

How is woodland taxed on inheritance in France?

Woodland and forests are exempt from gift and inheritance duty to the extent of 75% of value, with no upper ceiling, in return for a thirty-year undertaking to apply an approved sustainable-management guarantee to the woods (Article 793, 2.2° of the General Tax Code). The relief has to be claimed with a certificate from the departmental director of territories confirming the woods can meet a sustainable-management guarantee, and the beneficiary must file an implementation report every ten years (Article 281 H bis of Annex III). Shares in a forestry group get the same 75% relief, calculated on the forestry assets they represent.

What are the conditions to keep the relief?

They differ by asset. For farmland on a long-term lease and GFA shares, the beneficiary must keep the land or shares for the committed period — five years, or ten years where the €500,000 threshold was taken — and the lease must stay in place; selling, gifting, or disposing of the usufruct or bare ownership inside that period claws back the tax with interest (Article 1727 of the General Tax Code). For woodland, the sustainable-management undertaking must be honoured for thirty years, and a breach brings a supplementary duty of 30%, 20% or 10% of the relief depending on when it occurs. On a sale of woodland the undertaking passes to the buyer, and the buyer's breach claws back the seller's relief.

Does the relief still apply if I sell part of the land?

It depends on the asset. For directly held farmland, breaking the five or ten-year holding condition for only some parcels claws back the relief on those parcels alone (Cour de cassation, commercial chamber, 10 July 2018, no. 16-26083). For GFA shares, breaking the condition on only some shares claws back the relief on all the shares received. For woodland, a management breach affecting only part of the woods is recovered proportionately to the area concerned, and the undertaking continues on the rest.

Can I combine these reliefs with other exemptions?

Generally no on the same asset for the same transfer. The Natura 2000 relief expressly cannot be combined with any other gift-and-inheritance-duty exemption on the same land (Article 793, 2.7° of the General Tax Code). The reliefs for farmland, GFA shares and woodland each apply on their own terms, and a family holding several kinds of rural asset has to match each asset to the relief that fits it, category by category, rather than stacking reliefs on the same value.

How our French lawyers help with farmland and forestry relief

These reliefs are valuable, but they are conditional, and the conditions run for years after the deed is signed. We advise owners, heirs and donees on whether farmland, GFA or forestry-group shares, or woodland qualify for the partial exemption; on which threshold and holding period to choose; and on how to claim the relief in the deed of gift or the succession declaration with the right certificate and undertaking. Where a rural estate is being passed on, we structure the transfer so the relief holds and is not lost to a later sale, an ended lease, or a broken management undertaking — and we advise on the clawback exposure before, not after, a disposal.

This article is for general information only. It does not constitute legal advice and does not create a lawyer-client relationship. How these reliefs apply depends on the land, the lease or management in place, the family, and the value transferred. Contact our French lawyers for advice on your situation before acting.