After the success of using artificial intelligence (AI) to find 120,000 undeclared swimming pools, the French tax authorities are widening their search criteria.
Garden sheds, verandas, outbuildings and even small cottages are now in the firing line, confirmed the Direction générale des Finances publiques (DGFiP) in a press conference on Thursday (June 22).
It should be noted that not all buildings will be subject to property tax increases if declared, but they should be declared nonetheless – and we explain how.
Crackdown rakes in €30 million extra
Since 2021, tax authorities have been using AI to detect undeclared swimming pools in houses across France.
Civil servants use software - developed in partnership with Google and Capgemini, a consultancy firm - to discover undeclared aspects of properties.
The software detects “the outlines of buildings and swimming pools potentially liable for direct local taxes, based on public aerial photographs taken by the French National Institute for Geographic and Forestry Information”, explained the DGFiP.
When a pool is spotted in a home, it is cross-referenced with the current information held by the tax authorities, to see if it has already been declared.
If it has not, they send a letter to the homeowners, telling them they have to declare it to the tax office.
It is big business too, earning the authorities an extra €30 million per year through making sure swimming pools are correctly declared. Such changes can increase a property’s value and by extension its property tax rate.
The efficacy and accuracy of the software, therefore, explain the expansion of the service to other undeclared property parts that can be seen by aerial photography.
The rollout may be slightly different for the new wave of structures, as authorities make sure the system is just as efficient for constructions like garden sheds and verandas.
“We're going to need a bit of time to ensure that the model is as good as it is today for swimming pools", said Jérôme Fournel, head of the DGFiP.
What structures are included?
The software will look for exterior property expansions – garden sheds, verandas, and various outbuildings – that have not already been declared.
As a reminder, all property extensions (even if prior approval to construct is not required through a works declaration) must be declared within 90 days of construction, using Formulaire 6704.
Completing this form also grants a two-year exemption from property tax rises (that may be payable due to the construction), which are applicable from the get-go if the form is not submitted within 90 days.
Despite having to declare all extensions, not all constructions will lead to an increase in property taxes, however.
For example, garden sheds under 5m² are not liable to pay property planning tax, nor do they need a prior works declaration (but they must still be declared using the form above).
For sheds up to 20m² in size, it is up to the local authorities to decide whether they should be taxed – sheds of a larger size are subject to pay increased tax due to the construction.
Similar rules apply to terraces – their construction, regardless of the work declaration required, may incur increased taxes if “it is impossible to move it without demolishing it”, says France’s service-public website.
If you are unsure a new extension will result in increased taxes, you can ask your local property tax office for an estimate.
Property owners already under pressure
The expansion of this software is not the only current plan by the DGFiP to increase its knowledge of the status of properties in France.
The mandatory declaration form, completed through your personal tax space or by calling the tax authorities, must be completed by June 30.
The declaration will allow the tax authorities to receive up-to-date information about all properties in France, including their status (as either a main or second residence), their habitability, and their features – all of which could affect taxes levied on properties.
They have already said the declaration will be used to ensure that taxe d’habitation – from this year only applicable to second homes – is being levied correctly.
You can read our article about last-minute questions – which includes links to all our other resources on the declaration – here.