start signal. All taxpayers with property assets exceeding EUR 1.3 million must complete a Property Wealth Return (IFI) at the same time as their income tax return. Deadline is May 24 to June 8, depending on the residency department. So, a good month for 140,000 concerned families to roll up their sleeves is left. Because unlike tax returns, which are primarily pre-filled by tax authorities, IFIs require taxpayers to do real, substantive work.
He has until January 1, 2022 to assess his assets and liabilities, calculate the tax due and complete the filing online. A delicate exercise: You have to find the right balance between scrutiny to avoid inflating your taxable assets and taxes payable, and the obvious understatement that can lead to a recovery. Patrick Janel, director of private management at consultancy Equance, advises: “Don’t hesitate to use all available resources to evaluate your assets. Sales announcement websites, notary databases and even the Patrim website for tax services allow you to Find out about recent sales near your home with your tax ID number. »
Discounts and Waivers
The principal residence benefits from a 30% tax reduction: as a result, the taxpayer only registers 70% of its value in their return. Other real estate (second-hand homes, rental properties, parking lots, warehouses, etc.) may benefit from discounts in certain circumstances. “There are no specific rules for real estate investing, but market practice,” said Marion Calmette, deputy director of asset engineering at Societe Generale Private Bank. Jurisprudence recognizes discounts because leased goods are not as liquid as empty goods. »
Discounts are usually between 10% and 15% of the property value, which is reasonable as the owner may not be able to sell it at market value because it is occupied. Same rationale for community property: A family home belonging to siblings can also legally be the subject of a reduction.
Specialty real estate is exempt from IFI, while forest and rural properties on long-term leases are 75%. “The real difficulty lies in assessing the representative value of real estate assets held through companies,” notes Marion Calmette.
Its shares can be excluded or exempt from IFI in terms of professional property, subject to a number of conditions. Conversely, for SCPI, these collective investments invested in real estate, reporting is extremely simple, as the management company directly provides the taxpayer with the amount to be entered in their return.
Liabilities and donations
Then, it still assesses liabilities. “Only liabilities corresponding to assets subject to IFIs can be deducted,” explains Sandrine Quilici, Director of Wealth Engineering at Pictet Wealth Management. In the case of timber and forests, 75% is exempt: only 25% of contractual debt is deductible as a liability. Property taxes on principal residence loans, rental properties, and various properties held are also required. “Beware of debts that are entered into within a company just to reduce its assets, and therefore its valuation at IFI,” Sandrine Quilici added. Lawmakers accurately listed what were deemed fictitious responsibilities to avoid abuse. »
The taxpayer’s job doesn’t stop at calculating taxable net worth – assets minus liabilities. It is up to him to assess the amount of IFI to be paid, applied by batch size, with an interest rate of up to 1.5%. He will receive a tax notice in August and must pay the tax authorities by September 15. However, donations are possible: donations to foundations or research or higher education institutions recognized as public utilities, within the limit of the 50,000 tax credit, will result in the IFI deducting up to 75% of its amount. You must donate before sending a statement. In 2020, 18% of taxable households chose this solution instead of paying this tax.
Finally, on the one hand, the total amount of income tax in 2021, including social security contributions and any special contributions to high incomes, on the other hand, IFI 2022, must not exceed 75% of the total taxpayer received in 2021. Otherwise, the excess will be charged by international financial institutions.
actual case
A couple owns a main residence worth 2.1 million euros. Credit has been refunded. After a 30% reduction, it is subject to a 0.70% margin bracket. IFI: EUR 3,647.
Agnes Lambert
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