This valuation must be carried out every year

The French real estate market has decreased, as in other countries, true in 2009, as well concerning the volumes of transactions that the price per square metre. The decline in prices, began in 2008, would have reached, according to experts, between 7 and 10 according to the regions. It is therefore not a collapse, unlike in other countries. However, since the beginning of the year, this trend seems to reverse even if expert opinion remain contradictory.

Then, how account of the evolution of the market for one year on year to evaluate his assets Indeed, if until 2008 the indebted attempted to limit the impact of the surge in prices, we know that, since the practice is more to measure the potential reductions applicable to their property. It is here that should be taken to not reflect reductions in unjustified, because the price per square metre has not declined in certain regions or areas, either because the value in the title of the previous years was objectionable. Where public finances are at Bay, the tax administration is more inclined to examine the records of the taxpayers "pessimistic" on the assessment of their property!

In ISF, real estate remains an important issue. The proportion that real estate in the fortune of the indebted, in view of the decline of stock markets, remains major. And, while the removal of the ISF does not appear to be a feasible way to policies, the issue of the exemption of a principal residence, she could see again the day.

If the case of owners who are unaware of is "wealthy" - they did not measure the evolution of prices since their acquisition - is often some foreign individuals, non-residents in France, but who have real property in our territory are found them also, to their surprise, caught by this tax. Thus, for all indebted that meet or exceed the fateful threshold of 790,000 euros, the question of the enhancement of the real estate heritage remains crucial.

Annual evaluation

One of the major difficulties encountered by taxpayers in the establishment of the Declaration of ISF is to assess certain property component their heritage under the potential control a posteriori of the tax administration. This is the case of buildings. The taxpayer has the responsibility of determining the market value of the property, i.e. the prices that would result from the normal game of supply and demand, taking into account the data market, physical, legal and economic property characteristics, disregarding any value of personal convenience and any "windfall effect." As an exception, dismemberment of property, property must be included, in principle, in the heritage of the life tenant for their value in full ownership, i.e. without taking into account the impact of the break-up on the value of the property. However, the legal specifics of the detention (such restrictions making it more difficult to the liquidity of the property for the "owner" - a joint tenancy, for example) can affect the value of the property in the heritage of the life tenant. This valuation must be carried out every year.

In some cases, texts to address the problem of valuation of real property. But it is of indicative elements, or even threshold a minimum. So the texts provide that if, in the two years which preceded or followed the cause of tax (i.e. 1 January of the taxation year), sent buildings were the subject of a public auction upgrading cannot be less than the price of the public Award (unless the building has undergone substantial transformations). For valuing his property, the taxpayer may rely on several evaluation methods that it can use separately or it can combine.

With regard to the report property, it may retain the valuation method by the revenue, which is to assign, annual revenue generated by the property, a rate of return depending on the nature and the characteristics of the property (the rate of real return, which naturally depends on the nature of the property and the object of leasing is often estimated around 5).

"Method by comparison".

There is a more accurate method of so-called evaluation "of comparison", which is to identify recent transactions on January 1, 2010 on inherently similar goods. This method is that accepted by the tax administration to challenge the assessment made by the taxpayer and that also admitted by the courts; It is for the taxpayer to seek, regardless of the method adopted, assignments as

expensive, agreed in its neighbourhood, on similar goods with comparable characteristics: floor, area, date of construction, style, State, legal, free or busy status, etc.

This last method, although the most secure, requires a comparative analysis tedious, difficult to implement for a particular, because of the difficulty of access to reliable sources of information. Moreover, it is sometimes impossible to be implemented when the property is located on a property of exception (historic monuments), atypical market too geographically isolated (lack of comparison) or even in the absence of a sufficient number of assignments of comparable goods in respect of a given year. It may be noted in this regard that in January of this year, the number of transactions had declined, which makes this more difficult comparison exercise. If in doubt, it may be advisable to collect advice from real experts approved, notice that may be useful (but not systematically spillover) for further discussion with the administration.

When the property has been acquired or the declared value was previously appreciated consistent elements, the taxpayer may, from one year to another, make a simple adjustment of the previously accepted reference value by applying an annual coefficient representing the evolution of market. Statistics of prices by geographic area are available from the Chambers of notaries or other organizations such as, for example, the National Federation of the Safer.

Adjust the value of the property

The taxpayer may, after having determined the market value of the property by reference to those of the market, adjust it because of legal or physical characteristics specific to this property. Thus, the taxpayer is allowed to deduct a discount of 30 on the value of a principal residence (if it holds directly and not, for example, through a real estate civil society). It can also apply a haircut on the value of rental property with legal constraints affecting the lease (Act of 1948, commercial lease, leases rural, property held in joint tenancy...). Indeed, the property is supposed to be assessed free of any occupation.

Nevertheless, it should be be cautious in the use of the haircuts (apart from the right haircut applied to principal residence), especially when they are used cumulatively. You must have in mind that the tax administration is likely to exercise its right of control with a very strict approach to possible haircuts.

It is therefore advisable to maintain, for a year on the other, a certain continuity or the consistency of the methods of evaluation and, above all, the history of the elements of law or of fact justifying performed valuations, for possible discussion with the administration. The latter has other more important than individuals of information resources; the administration has, indeed, access to information on real estate transactions carried out via the conservation of the mortgage, or internal tools such as the Observatory of the local real estate assessments (eye). Moreover, the tax administration has committed the constitution, from heritage information available to it, a public database. Designed for the search for "comparison terms" and the consultation of the real estate market trends, it pemettra to help local communities to establish real property taxes.

Take account of the tax shield

This upgrading exercise may seem sensitive for properties located in France, but the exercise may be more difficult when the property is located abroad. Remember, in effect, that any resident tax in France subject to the ISF and possessing properties located outside our territory must in principle include and thus enhance its overseas buildings (except in case of the "unpatriated" A 885, 1 al article 2 of the General Tax Code). If the France has signed 40 international conventions aimed at avoiding double taxation for EWB, situate abroad must, except in specific cases, be included in the taxable base (potential double taxation is avoided when there is a tax convention applicable, by the granting of tax credits).

Finally, the upgrading exercise must now be carried out taking into account the provisions of the tax shield, as long as it is not questioned. Indeed, a grateful that properly values its property is likely to more easily enable the shield; If administration straightens the revaluations, the ISF additional paid in respect of the relief will not be taken into account for the calculation of the shield.

Symmetrically, the foreign tax residents who have invested in real estate in France not spared by the ISF on their buildings in France. For them, on the other hand, the tax shield can not play.