Lhe wealthy taxpayer must, each year, declare to the tax authorities the “market value” of their real estate, that is, the price at which he could sell them, if he decided to part with them. The administration requires that he determine this value by reference to recent transfer prices of similar properties in the area.
But how do you use this comparative method when you own an atypical house?
In 2010, M. and Mme X estimate the value of their property at 2.7 million euros, to say the least original, since it is the exact replica of the one in which the first President of the United States, George Washington, lived in Mount Vernon, Virginia. This copy was built on the edge of the Bois de Vincennes, for the International Colonial Exhibition of 1931. It was then moved to Vaucresson (Hauts-de-Seine), and classified by this municipality “Remarkable building” – which prohibits, in particular, modifying its white facades.
When the Xs make their declaration of solidarity tax on wealth (the ISF, replaced since 2018 by the tax on real estate wealth, the IFI), they value their house according to its purchase price, readjusted in view of the evolution of the real estate market. In 2013, the tax administration carried out an audit, and noted that“There is no market for intrinsically similar goods”.
Apply the comparative method
Nevertheless, it makes a comparison of the price per square meter with three luxury residences sold in Hauts-de-Seine, in 2008 and 2009. It concludes that in 2010 the replica of Mount Vernon was worth 5.6 million euros, and demands equivalent taxation from its owners.
The X contest this recovery. They explain that their house, all made of wood, must be regularly treated against pests and humidity, which is expensive; and that its classification constitutes a constraint. Wasted effort. They then go to court and their lawyer, Me Guy Parlanti maintains that the three residences selected by the finance department were not comparable, in terms of surface area, location, date of construction, cadastral category and, of course, material.
The Versailles Court of Appeal ruled in his favor, the May 4, 2021. She concludes that the administration does not prove that the X have undervalued their property and reverses their adjustment.
It specifies that if the administration wanted to stick to the comparative method, it had to broaden the scope of its research – to Ile-de-France, for example. When it would have found similar goods (castle, architect’s house or historic monument), it should have applied an allowance to that of the X, in order to take into account its particularities and constraints. Its price per square meter would then undoubtedly have been close to that declared by the couple.