Allowance (abattement)

The French word abattement covers two different things that are best kept apart. In tax law, an abattement is a reduction of the taxable base laid down by statute, at a fixed rate, with no room for debate: 20 % on the value of the deceased’s main residence for inheritance tax when it is occupied by the surviving spouse or certain children, 30 % on the main residence for the IFI (French wealth tax on property). These statutory allowances are applied after the valuation, to the vacant-possession market value of the property.

In valuation practice, an abattement is a reduction the valuer applies to a reference price or to a value to reflect a feature of the property: works to be carried out, occupation by a tenant, a complex legal situation, the absence of a market. The Charte de l’expertise en évaluation immobilière (French property valuation charter) reminds us that these allowances are not mechanical rates and that every discount or premium applied must be justified. In practice, “allowance” is often reserved for a percentage reduction and “loss of value” for an amount in euros, but usage is not settled.

Where the rule comes from

The statutory allowances are set out in articles 764 bis and 973 of the French General Tax Code. Title II § 8.14 of the Charter (6th edition, November 2025) describes the discounts and allowances accepted in tax matters: the allowance on the main residence, and the discount for let property, which varies with the type of lease and is higher where the lease gives the tenant strong protection. Title III § 2.1.2 requires every adjustment made under the comparison method to be justified.

In a valuation report

I always distinguish the statutory allowance, which I mention for information but do not apply to the market value, from the valuation allowance, which I justify. For works, I prefer a quote or an item-by-item costing to a flat percentage, and I note, where the market shows it, that the discount buyers actually apply can exceed the cost of the works (uncertainty, delay, inconvenience). For occupation, I analyse the lease, the rent and its remaining term, and compare with sales of tenanted properties. The report sets out the vacant-possession value, the allowance and the resulting value, so that the reader can discuss each step.

Example

Inheritance: the deceased’s house, occupied by his widow, is worth €320,000 with vacant possession. I apply no allowance to this figure, which is the market value; the notaire (French civil-law notary) then applies the statutory allowance of 20 %, giving a taxable base of €256,000. Another file: a flat in good condition sold at €3,000 per m² serves as a reference for an identical flat whose bathroom and wiring need replacing; the quote is €18,000 for 60 m², or €300 per m²; I adopt an adjusted reference of €2,700 per m², rather than an unexplained “15 % allowance for works”.

Not to be confused with

A discount (décote) is the general term for a reduction in value justified by the market; the discount for occupation is one particular case. A loss of value (moins-value) is a loss actually suffered, for instance as a result of a defect or a neighbourhood nuisance.