Two "Conseil d'Etat" decisions made on 15th February 2016 specify the possible methodologies for determining the allocation of the acquisition price and enumerate a list of methods that the administration may use to contest within the allocation:
- Transactions carried out on bare land of close dates in the same geographical area.
- Failing this, the net replacement cost of buildings method,
- If it is not possible to use the previous methods, accounting data from the balance sheets of other companies that have acquired comparable buildings at similar dates in terms of location and construction.
It should be noted that the Council of State does not mention the so-called promoter balance sheet method.
The Association Française des Sociétés d'Expertise Immobilière uses four possible methods: comparison with market data, the method by calculation of the market value of the land (Bottom up), i.e. by the developer's balance sheet method, the method by the net replacement cost of the buildings (Top Down) and the so-called average or statistical approaches.
Given the complexity of the subject and the accounting and tax issues, we recommend that you consult a real estate expert. BNP Paribas Real Estate Valuation is at your disposal to give you a detailed answer.
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