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How do I get an evaluation for inherited property in France?
It is important to get a fair and accurate valuation at the date of death
Valuations of property forming part of someone's estate have to be assessed at a fair market rate
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Reader question: I live in the UK and my wife, recently deceased, owned a half-share in a French house with her sister. She left it to me, her executor, along with her other estate in the UK and France. I need a valuation of the French property for probate – how do I go about this?
It is important to get a fair and accurate valuation of the French property at the date of death. This should be used for the UK probate and for the French succession.
The usual way to approach this is to ask the notaire and/or local estate agents to provide a valuation for probate (estimation or avis de valeur vénale). To ensure accuracy, I generally recommend getting two or three valuations.
There may be a fee for the valuation – around €200 – but if you are intending to sell the property the agent may waive this with a view to being involved in the sale.
If the estate passes tax-free to a surviving spouse (no inheritance tax is due), some French notaires accept a less formal valuation from the surviving spouse, which they should base on similar local property values. If you are unsure of the property market, it is always safest to get a professional valuation.
If the sale occurs at the same time as signing off the succession, and the market has not changed much since the date of death, the notaire may use the sale value as the date of death value.
The figure you declare must be a true reflection of value; do not attempt to declare lower values to avoid tax or fees.
For more advice on legal issues in France visit French Law Consultancy Limited
Bear in mind that the value declared for inheritance may well become the starting value against which capital gains tax is calculated in the case of a future sale. Declaring an unduly low value may result in an artificially high taxable gain.
It may well be that the inheritance tax advantage is eaten up by a higher amount being subject to capital gains tax. This can be 19% capital gains tax plus 17.2% in social charges, totalling 36.2% for French residents, or slightly lower for UK residents. The UK CGT on the gain is 18% or 24% depending on tax band.
In short, a low value is not always beneficial in the long run, unless the property has little prospect of increasing significantly in value. If in doubt, please seek professional advice.
John Kitching is a director of French Law Consultancy Limited
