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TAXES

French taxman launches crackdown on undeclared property extensions

French tax authorities are planning a crackdown on people who do not declare improvement to their homes such as extensions and swimming pools, by using aerial photos of property.

Published: 29 August 2022 12:02 CEST

The French tax service has fixed its eyes on verandas and home extensions, with the hopes of locating those who failed to declare any new, permanent changes to their property to the tax authorities. 

The DGFiP – the Public Finances Directorate General in France – recently announced its intention to extend the use its artificial intelligence tool, originally intended to locate undeclared swimming pools, for seeking out undeclared home extensions as well. 

In France, the property owners’ tax taxe foncière is linked to home value, so any “permanent” changes that increase property value must be declared. For pools, property owners must declare the installation of a permanent in-ground swimming pool within 90 days of construction.

Officially, tax authorities refer to something as being permanent if it is fixed to the ground with “large screws or cement.” This basically means that if you cannot pack up the deck or pool at the end of the season, then it could be considered as part of your property taxes for increasing the value of your home.

READ MORE: Everything you need know about installing a swimming pool at your French property

The software, which was created by Google and the French IT company, Capgemini, was developed at the behest of French tax authorities.

Essentially, the tool uses “aerial photographs taken by the National Institute of Geographic and Forestry Information (IGN)” to increase the accuracy of “direct local taxation,” explained a spokesperson from the DGFip to French daily Le Parisien at the start of the project.

Originally, it was tested out in nine départements across France in 2021: Alpes-Maritimes, Var, Bouches-du-Rhône, Ardèche, Rhône, Haute-Savoie, Vendée, Maine-et-Loire and Morbihan. The experiment helped locate hundreds of undeclared swimming pools and allowed tax authorities to levy over €10 million in increased tax revenue, as shown in the graphic below. 

At the start of the project, a spokesperson for the DGFiP told Le Parisien that they hope to extend the software to “the entire metropolitan territory in 2022.” 

Now, they are hoping to further widen the scope of the technology so that it can also locate verandas and home extensions. 

However, the project has received some backlash for having a high rate of errors. Philippe Laget, a worker a the Public Finances office in Bouches-du-Rhône noted to Le Parisien that his département had error rates of about 30 percent, “which will lead to the taxation of certain pools that should not have been taxed, or even to tax adjustments.”

This was often due to the software mistaking non-permanent installations or above-ground pools for permanent ones. 

The experimental round of the software simply informed property-owners that an undeclared swimming pool had been located on their property, and asked them to respond by providing details such as the time of construction and size of the pool.

READ MORE: Reader question: How can I challenge my French tax bill?

The director of the DGFiP assured Le Parisien that before the technology is extended, they will “need to be sure” that the software will be able to decipher between home extensions and other outdoor structures such as dog houses or kids’ backyard forts. Tax agents are also hopeful that the software will allow them to locate abandoned buildings so that taxpayers are not unnecessarily taxed for vacant, derelict structures on their properties.

A report at the end of the 2021 project found that 94 percent of those who received this letter did indeed “confirm the taxable character of their swimming pool,” though local tax agents also noted an increase in complaints after tax notices were sent in August. Property-owners can contest the results of the software by sending photographs or requesting that an agent visit their home.

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PROPERTY

Revealed: Where foreigners are buying second homes in France

Foreigners are increasingly buying second-homes in France again, according to the latest figures – with one notable exception.

Published: 17 April 2024 13:43 CEST
Revealed: Where foreigners are buying second homes in France

The number of non-residents buying property in France is on the rise, but British property hunters are on decline, according to a new report from Notaires de France.

French notaires are crucial figures when it comes to buying and selling property in France – in fact a sale cannot legally be completed without a notaire – and their latest report, using figures from 2022 shows that after the pandemic the number of foreign purchasers of property in France was on the rise again – with a total 1.8 percent of all transactions on existing properties in mainland France.

In Paris, the number of non-resident foreign buyers reached its highest level in 10 years, comprising 3.4 percent of all purchases, Notaires de France’s figures show.

READ ALSO EXPLAINED: The real role of a notaire when buying a house in France

Second homes are popular in France – in fact one in 10 properties is a second home – but most of them are owned by French people who like a little bolthole by the sea, in the mountains or deep in rural France. Often these homes are former family properties now used as holiday homes.

There is however a significant minority of second homes that are owned by people who live outside France – from chalets in ski resorts to seaside properties or old rural homes bought as a renovation project.

And after a difficult period during the pandemic when travel restrictions meant long periods when owners could not travel to their French properties, the market is now picking up again.

In the Creuse département of central France, eight percent of all sales in 2022 were to non-French second-home property hunters – albeit that Creuse is one of France’s most sparsely populated départements with a smaller overall number of property transactions.

In Alpes-Maritimes (which includes the city of Nice) 7 percent of all property transactions were to foreign second-home owners while the département of Ardennes on the Belgian border saw a similar picture.

Over to the west, foreign buyers were responsible for 6 percent of property purchases in Dordogne and Charente – areas traditionally popular with Brits.

The same figure was reported in the central département of Nièvre and the Alpine area of Haute-Savoie.

READ ALSO REVEALED: The top European countries for overseas property buyers

Notably, however, the number of Britons buying property in France has fallen steadily and continuously in recent years, and has dropped below 20 percent of all foreign non-resident purchasers in 2022.

Since Brexit, life is more complicated for British second-home owners who must either restrict their visits to 90 days in every 180 or go through the time-consuming process of getting a short-stay visitor visa.

In fact, Belgian buyers are now the most common in France, Notaires de France said. They represented 19 percent of all purchases by non-French non-resident buyers last year. They were the chief non-resident buyers in the regions of Hauts-de-France, Corsica, Occitanie and Grand-Est, the second most common non-resident buyers in Normandy and Provence-Alpes-Côte d’Azur.

German buyers, meanwhile, represented 11 percent of all non-French non-resident purchasers in 2022, buying the most property of all non-resident foreigners in Provence-Alpes-Côte d’Azur.

Britons were still well represented, however, topping the foreign-buyer charts in Brittany, Normandy, Centre-Val-de-Loire, Pays-de-la-Loire and Nouvelle Aquitaine, and were the second most-common foreign purchasers in Occitanie and Auvergne-Rhône-Alpes.

US buyers, meanwhile, were the most interested in buying in the Paris region, the Notaires’ study found.

And it seems that foreign buyers are prepared to push the boat out for their dream home in France. Since 2021, prices for homes bought by non-resident foreigners have risen faster than prices for properties bought by French people.

READ ALSO Revealed: The ‘hidden’ extra costs when buying property in France

Away from the capital, the sale price of older property rose about 15 percent between 2019 and 2022. But for non-resident buyers in France, that price increase over the same period was 29 percent, compared to a relatively low 14 percent for French property buyers here.

In the Ile-de-France, the price of homes bought by non-resident foreigners jumped 22 percent in the same period, compared to 11 percent for anyone living in France.

READ ALSO How long does it normally take in France to buy a property?

Meanwhile, in Centre-Val-de-Loire, where Britons were the most popular non-French non-resident buyers, prices rose 30 percent among properties bought by non-resident foreigners, compared to just two percent for French residents.

By region 

Percentage of purchases in 2022 made by non-resident foreigners.

  • Brittany – Brits 30 percent, Germans 21 percent, Belgians 18 percent
  • Normandy – Brits 33 percent, Belgians 26 percent, Germans 12 percent
  • Hauts-de-France – Belgians 68 percent, Dutch 10 percent, Brits 8 percent
  • Grand Est – Belgians 24 percent, Germans 23 percent, Spanish and Portuguese 14 percent
  • Bourgogne-Franche-Comté – Dutch 31 percent, Swiss 21 percent, Belgians 16 percent
  • Auvergne-Rhone-Alpes – Swiss 23 percent, Brits 18 percent, Belgians 17 percent
  • Provence-Alpes-Côte d’Azur – Germans 16 percent, Belgians 15 percent, 11 percent made up of Swedish, Norwegian and Danish nationals
  • Corsica – Belgians 37 percent, Germans 27 percent, Italians 21 percent
  • Occitanie – Belgians 23 percent, Brits 18 percent, Germans 11 percent
  • Nouvelle-Aquitaine – Brits 45 percent, Belgians 14 percent, Dutch 14 percent
  • Centre-Val-de-Loire – Brits 27 percent, Belgians 20 percent, Dutch 20 percent
  • Pays-de-la-Loire –  Brits 39 percent, Belgians 19 percent, Americans 9 percent
  • Île-de-France – Americans 14 percent, Lebanese 8 percent, Italians 8 percent 
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