One of the most unpopular taxes in France is the inheritance tax. According to a June 2024 OpinionWay survey, nearly three out of four French citizens consider it excessive. The tax amount is determined based on the inheritance declaration, which heirs must submit to the tax office within six months of the relative’s death.
However, if the inheritance includes real estate intended for sale, heirs can delay filing the declaration until the transaction is completed. In this case, they must make an advance payment close to the estimated tax amount.
📝 “If the advance payment is lower than the actual tax, penalties apply only to the unpaid portion,” explains François Cadène, Vice President of the Chamber of Notaries of Hérault.
🏡 Selling three apartments at a reduced price
This is exactly what sisters Delphine and Laurence did after their mother passed away in September 2023. They inherited three apartments: ✔ 70 m² in Saint-Germain-en-Laye (estimated at €580,000) ✔ Two 30 m² apartments in the Paris region (estimated at €110,000 each)
Based on these real estate agency estimates, the sisters paid an advance tax of €68,433 in March 2024. However, the properties were ultimately sold at lower prices: 🔻 €500,000 for the largest apartment 🔻 €95,000 for each of the two smaller ones
This difference allowed for a tax reduction.
💡 “If the actual sale price is lower than the initial estimate, part of the tax can be refunded,” clarifies François Cadène.
💰 €24,000 refund
After completing the sales, the sisters submitted an updated inheritance declaration in September 2024, requesting a refund for the overpaid tax. Three months later, in December 2024, the tax office approved a €24,000 refund, reducing their final inheritance tax to €44,433.
⏳ “It is crucial to adhere to the deadlines set by the tax office. The penalty is 0.20% per month of delay, increasing to 10% after the 13th month and up to 40% if the declaration is not submitted within 90 days of an official notice,” reminds the notary.
📉 Stricter tax policies
Previously, when the real estate market was struggling, the tax office was more lenient and sometimes waived penalties. However, policies have now changed.
🚨 “In recent months, due to a slowing market and declining tax revenues, the tax office has stopped granting penalty reductions,” warns the Vice President of the Chamber of Notaries of Hérault.
Now, heirs must be even more careful when calculating taxes and meeting deadlines to avoid extra costs.
If you need a real estate valuation and sale assistance for an inherited property, contact me.