Therefore take care to two major pitfalls

Now, more doubt, the real estate market is down. The major issue for the ISF is to know how to report this development for the assessment of his property. The answer is much more difficult that the slope varies according to regions. In this regard might usefully refer to indices published by the Chambers of notaries. But this does not solve everything. A further complication is that, over these past years, exercise for the indebted was instead an attempt to limit the impact of the surge in prices. Therefore, take care to two major pitfalls. The first is to ensure that can register a decline in the value 2008: indeed, last year, the decline in the market was recorded mainly in the last quarter. But, in some cities or regions, the price per square metre has not necessarily fallen between January 1, 2008 and January 1 2009. The second pitfall is to make sure, before you apply discounts on the value selected in 2008, that it was indeed to that of the market. It is known well in fact that the sous-valorisation is sometimes practised in ISF... Do not forget that in the period of "fiscal starvation", the administration may be tempted to look more closely record the "pessimistic" taxpayers on the assessment of their property!

Despite the new trend of the market, real estate still a major issue for EWB. Indeed, despite the drop in found this year, successive increases in the price of real estate have been the price per square metre at levels such that it represents today more than 50 of the heritage of the indebted imposed in the two first instalments.

If there is often the case of property owners in regions that experienced a real surge in prices, can also be noted that among the taxpayers can be included, often to their great surprise, some foreign individuals non-residents, in France, who have real property in our territory.

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 in any critical event.

The upgrading exercise

It is one of the major difficulties encountered by taxpayers in the establishment of their Declaration of EWB: not only they must assess the property component their heritage, but they have to say that their estimate will be potentially subject to the control a posteriori of the tax administration. In the case of buildings, the sources of disputes are countless.

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, and even more so this year, year of reversal of market.

In some cases, texts allow, in a manner rather anecdotal, to respond to the problem of valuation of real property. But then again it is indicative elements, or threshold a minimum. It is thus that 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), passed buildings were the subject of a public invitation to tender, 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 methods of evaluation, it can use individually or combine between them.

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

There is a more accurate method of evaluation method known as "compared", which is to identify, in the number sufficient, the

recent transactions on 1 January 2009 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 whether the chosen method for hire assignments, intervened in his neighbourhood, on similar goods with comparable characteristics: floor, area, date of construction, style, State, legal, free or busy status...

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 on 1 January of this year, the real estate market in Bern, the number of transactions had declined, which makes this comparison more difficult exercise, and, indeed, for the taxpayers and the tax administration. If in doubt, it may be advisable to collect advice from real experts approved, notice that can be useful for further discussion with the administration.

As a practical rule, when the property has been acquired or the declared value was previously appreciated from consistencies, the taxpayer may, from one year to another, make a simple adjustment of the previously selected reference value by applying an annual factor intended to represent the evolution of market. In this regard, the taxpayer can obtain from the Chambers of notaries or other agencies (National Federation of the Safer, for example) price statistics on the geographical area concerned.

The taxpayer has the possibility, after determining the market value of the property by reference to market, to adjust the latter because of legal or physical characteristics specific to the property, which may affect its market value. Thus, the taxpayer is entitled to deduct a discount of 30 on the value of a principal residence (if it holds directly). 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 cannot be too advisable to retain, for a year on the other, a permanence or least a coherence of the selected evaluation methods and especially the history of the elements of law or of fact justifying performed valuations, this for a future discussion with the administration. The latter has other more important than individuals of information resources; Indeed, the administration has access to information relating to real estate transactions in the districts, through the conservation of the mortgage, or some internal tools such as the Observatory of the local real estate assessments (eye).

This upgrading exercise may seem sensitive for properties located in France, but exercise can be even more difficult when the property is located abroad. Remember, in effect, that any resident tax in France and possessing properties located outside our territory subject to the ISF must also in principle include, and therefore value, its buildings abroad. If the France has signed approximately 40 of international conventions aimed at avoiding double taxation for EWB, situate abroad must, except in cases of certain national, 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 (see our comments below). Strategically, a grateful that properly values its property is likely to more easily enable the shield: indeed, 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 foreigners who have invested in real estate in France not spared by the ISF on their buildings located in France, when even their tax residence would not be in France. For them, on the other hand, the tax shield can not play.