whose assets consists mostly of buildings

Between 1997 and 2003, the number of individuals subject to the ISF jumped 67. It is true that, at the same time, real estate prices had exploded 120! It is therefore normal that the population concerned is thus multiplied.

Each year, in the discussions surrounding the finance bills, proposals are made to exclude, a minima, the principal residence of the base of the ISF; None of these proposals has, for the moment, resulted (see to that effect Rep.) Vachet; YEAR 14 Dec. (2004).

For the whole of the accountable, particularly perhaps for these new taxpayers who meet or exceed the threshold of 750,000 euros, the question of the enhancement of the real estate heritage is paramount.

The delicate exercise

the upgrader

One of the major difficulties encountered by taxpayers in the establishment of their Declaration of ISF is to assess certain property component heritage which must be assessed directly by them, subject to possible review of the tax administration. This is the case of buildings.

In this regard, 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." In case of dismemberment of ownership, assets must be included, in principle, in the heritage of the tenant for life to their full property value without taking into account the impact of the break-up on the value of the property. In contrast, other legal features (as 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 in the context of significant of the real estate market increases.

In some cases, the texts may attempt to provide assistance to the problem of valuation of real property. But, again, it is of indicative elements, or threshold a minimum.

Therefore, ministerial orders (order of 13 September 2005, "JO" No. 227, September 29, 2005, pp. 15.575) proposing indicative scales of valorisation of agricultural land. Similarly, 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 invitation to tender, upgrading cannot be less than the price of the public Award (unless the building has undergone substantial transformations).

To enhance good sound, the taxpayer may rely on several methods it can use individually or combine between them.

With regard to the report property, it may retain the valuation method by the income which is to set annual revenue generated by the property, a capitalization coefficient which depends on the nature and characteristics of the property (return real estate, depending on the nature of the property and the object of the rental, of course is often estimated around 5).

There is a more accurate method of assessment method "of comparison", which is to identify, in sufficient number, recent transactions in January 1, 2006 on inherently similar goods. This method is that accepted by the tax administration to challenge the assessment 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. Here, timely fashion phenomena can "pollute" the reference values. If in doubt, it may be advisable to gather the opinion of experts, advice which may be useful for discussion with the administration.

As a practical rule, when the property has been acquired or the declared value previously is consistent, the taxpayer may, from one year to another, make a simple adjustment of the reference value previously

restraint in applying an annual coefficient intended to represent the evolution of the market. In this regard, the taxpayer can obtain from the Chambers of notaries or other organisms (e.g.: National Federation of the Safer) statistics of prices 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 last legal characteristics or specific physical property, likely to affect its market value. Thus, it is allowed to deduct a discount of 20 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...).

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 much stricter approach of possible discounts.

It cannot be too advisable to retain, for a year on the other, a permanence or least consistency of the selected evaluation methods and especially the history of the elements of fact or law justifying performed valuations, for possible 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 your area, via 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 it should be recalled that any resident tax in France and possessing properties located outside our territory subject to the ISF must also in principle include, and therefore enhance its overseas buildings. If the France has signed approximately 40 international conventions aimed at avoiding double taxation for EWB, situate abroad must, except in specific cases of certain national (Finnish, for example), be included in the taxable base (the double potential taxation is avoided by the grant of tax credits). It is however noted that for these goods, the French tax administration has means of assessment than for French goods.

Symmetrically, the foreigners who have invested in real estate in France not spared by the ISF on their buildings located in France, and when even their tax residence would not be in France.

The case of non-residents

For this category of taxpayers are reminded that only property located in France fall into the tax base to the ISF. In practice, and taking into account the exemptions related to the financial investment in France (see), real property located in France are the decision of the taxable assets for non-residents. It is important to note that in application of French domestic law and international conventions, the concept of real property covers both buildings stricto sensu, generally, the share or shares in companies to balance real estate (i.e. whose assets consists mostly of buildings). Thus, for these taxpayers, the detention of the buildings through the interposition of companies, such as real estate civil societies for example, remains often inefficient to attempt to eliminate or reduce the ISF.

For this category of owners, invest in stone in France may be synonym of subjection to the ISF. Is this subject for some, little of regulation, difficult to grasp. But the administration tax, more and more aided by international administrative cooperation and always increased traffic information, shall in general compliance with tax obligations in the matter.

It can finally meet for taxpayers, residents in France or abroad, who have decided to establish patterns of detention to not reveal the identity of the natural persons actually owners of the buildings, the legislature has provided a rather chilling system: foreign and French companies which have, directly or indirectly, of the France buildings are liable to pay an annual tax of 3 (or widely higher than that of the ISF) on the value of buildings held January 1 unless they reveal the name of the associated tax administration; for foreign companies, they also have their headquarters in a State having concluded with the France a tax administrative assistance agreement to combat fraud and tax evasion. Wanting to preserve his anonymity to avoid ISF may therefore prove to be rather expensive.