When looking at the various possible cuts that can be applied to the wealth tax, it is good to ask yourself a few questions to get an idea of what cuts may apply to you.
While some areas of the possible cuts that may be applied used to be vague, some have been expressly authorised. These include:
- The 30% discount applicable on the principal residence
- The discount of leased assets
The administration does not accept discounts practiced on secondary homes where the proprietor still uses it.
The first thing to do is to go from a gross value to an in line value with the market.
Underestimating your principal residence, which will undergo a reduction, will only lead to
a questioning of the result by the tax administration.
The second question to ask is the foundation of the practice of discounts: is the property free (not rented, not subject to a prohibition, restriction)?
Are you free to decide to sell it, without constraint of occupation, without sharing the decision with another person?
If this is not the case, it is possible to practice a discount. This can vary in importance, depending on the circumstances.
The occupation of property by a tenant justifies a discount. A discount of 10 – 20%, or more (depending on the lease term remaining, to account for the fact that the occupation of a property underestimates its price) may be applicable.
Jointly-owned (indivision)?
For the same reasons, it is possible to reduce the value of property owned in joint ownership, given the constraints to consider, the most common being to obtain consent from all joint owners, both in the question of selling and for the price to ask.
Owned by an SCI?
This situation also justifies the application of a discount, if an SCI owns it, whose shares in the property can be proved to be below 99.99% (by either one person or a married couple).
You must therefore think to highlight all obstacles to the freedom to dispose of the property.
Dismembered?
Case law is tough when the property is dismembered. The usufructuary must bear the full value of the property in his ISF (Wealth tax) without being allowed to exercise a discount, even though he formed the project to sell the property, it would necessarily have to seek the agreement of the bare owners.
However, if the property is used by the usufructuary as a principal residence, it is accepted that they can demand the application of the 30% reduction provided for the main residence.
Visit http://www.cabinet-roche.com/en/ and contact them, as they are specialised in SCI taxation and taxation law in France.