Real Estate. How are your assets valued for inheritance purposes?

At the time of succession, all of the deceased's assets, including their real estate, are valued in order to be included in the estate assets.

This assessment is necessary for two reasons: on the one hand, to calculate the tax rights that the heirs will have to regularize after declaration of inheritance.

On the other hand, determine the value of each person's lots in order to proceed with the division of the property.

Regarding real estate, the general rule is that assets are estimated according to their market value (equivalent to the net seller price) at the time of death.

Given the obligatory presence of the notary during an inheritance involving real estate, it is up to him to estimate the property.

That being said, the heirs have every opportunity to also call upon a real estate advisor and have complete latitude in setting the amount.

Be careful, however, of the temptation to underestimate the value in order to reduce the inheritance tax to be paid, because the tax authorities are watching and could request an adjustment.

To help you, you can also use the PATRIM tool, available from your space on the tax website, or the “Request for land values” service .

There are certain exceptions to this general rule. For example, when the real estate was the subject of a regular donation, dividing it into bare ownership for the heirs and usufruct for the deceased.

In this case, there is no need to reintegrate the entire value of the property into the inheritance tax return, provided that this donation took place more than three months before the death.

The General Tax Code also authorizes a 20% reduction in the market value of real estate if it was the deceased's main residence and is intended to be occupied either by the surviving spouse or by a descendant.

Since January ^1, 2005, this provision also applies to civil partners. The tax authorities also allow a 20% discount on the market value of a property intended for rental, except in the case where this rented property was acquired under a tax exemption scheme (Malraux, Pinel, Denormandie, etc.).

Finally, certain charges relating to the property may possibly be added to the liabilities of the estate, and therefore be deducted from the assets.

So, if you inherit a property on which a mortgage loan is still outstanding, you can deduct the outstanding payments (given that you will have to pay them).

However, it is common to take out life insurance when signing a mortgage. Therefore, the remaining amount is covered by the insurer and you cannot deduct it.