Key points of this update
Number of judgments recorded: over 50.
Sources : decisions rendered by the Administrative Tribunals (AT) between January 1er May and June 30, 2026.
Summary: The case law of May and June 2026 provides several important clarifications regarding the evaluation methods for built properties, confirming the decisive role of the effective use of the premises, their objective characteristics, and the evidence produced by the taxpayers.
In the case of industrial establishments, the decisions listed specify the modalities for determining the rental value after the option to terminate a real estate lease contract has been exercised and illustrate the various grounds for excluding certain assets from the land tax base. A judgment also recalls that artisan establishments may, under certain conditions, be subject to the tariff method despite the importance of their industrial equipment.
As regards professional premises, the case law is particularly rich. It provides insights into the relevance of comparative terms, the tariff classification, the separate assessment of fractions of ownership, and the consequences of changes in use on the mechanisms of partitioning and levelling. The decisions regarding the weighting of surfaces are in line with the recent jurisprudence of the Council of State, which distinguishes the spaces assigned to the main activity from those that, although necessary for the operation, fulfill a different function. Several judgments also highlight the limitations of disputes based on the deterioration of buildings, while two decisions highlight the importance of compliance with the formal requirements applicable to updating the assessment parameters.
Finally, regarding the premises assigned for residential use, a judgment recalls that nuisances affecting the immediate environment of a property must be assessed in light of the benefits enjoyed by that property; the one may compensate for the other for the determination of the special situation coefficient.
Industrial plants
Real estate lease credit: determination of the rental value after the purchase option is exercised
The TA of Lille (May 15, 2026, No. 2209939) recalls that the minimum rental value provided for in Article 1499-0 A of the CGI, applicable to industrial assets acquired following a lease contract, corresponds to the value that would have been retained for the taxation of the lessor in the year of acquisition, including when the latter applied the provisions of Article 1498 of the CGI. However, this minimum rental value only applies if it is higher than the value determined according to the common law rules provided for in Article 1499 of the CGI, based on the cost of acquisition reconstructed for the leasing creditor. The Court also specifies that the derogating provision applies exclusively to assets acquired upon the exercise of the option, excluding the assets acquired subsequently, which must be assessed separately according to the accounting method.
This judgment follows directly from the jurisprudence of the Council of State, which has gradually clarified the modalities for applying the floor rental value established by Article 1499-0 A of the CGI (CE, 18 July 2018, no. 414 120, SAS Beaudonnet Serge ; CE, April 5, 2022, No. 448 710, SAS Rousseau ; CE, February 16, 2024, No. 473 815, SAS Diagast). It more specifically reiterates the principles outlined in that decision, according to which the floor rental value constitutes only a minimum of taxation and only concerns the capital assets acquired upon exercise of the option. The practical interest therefore lies less in a jurisprudential innovation than in confirming the necessity to compare the two valuation methods and to distinguish the assets originally acquired from the investments subsequently made. It is also worth recalling that the lender retains the possibility of contesting the floor rental value in the context of the taxes established for the years not subject to prescription (CE, 5 April 2022, cited above).
Industrial assets: the diversity of the grounds for excluding them from the land tax
The Strasbourg Administrative Court (May 22, 2026, No. 2402479) accepts the exclusion of many fixed assets recorded in the assets of an industrial establishment, on several distinct grounds. It considers first that various display stands, fences, catering equipment, heating devices and other removable or movable installations constitute movable assets that do not form part of the taxable property. It also excludes several exterior gates, which do not constitute real constructions within the meaning of Article 1381(1) of the CGI. The Tribunal then excludes expenditure corresponding to an isolated study and to works of moving, transferring, connecting or diverting installations, insofar as they did not result in the creation of any new installation or arrangement. On the basis of Article 1382, paragraph 11 of the CGI, it also recognizes the specific nature of several electrical installations, fluid supply pipes, and handling and lifting equipment, based on invoices produced and a certificate from the general manager. Finally, on the basis of administrative doctrine, it admits the exclusion of expenses for signage, signs, and an electric hoist, as well as those for green spaces surrounding the establishment, which are not directly necessary for the exercise of the professional activity.
This judgment is of particular interest due to the diversity of the grounds for exclusion considered and the importance given to the concrete characteristics of the assets. It recalls that a property included in the asset register does not necessarily constitute a property subject to the land tax: it must first be an eligible property, the expenditure must actually contribute to the cost price of such a property and no exemption may apply. The decision also illustrates the importance of an individualized analysis of the assets, supported by photographs, invoices and precise technical elements. It also calls for a rigorous distinction between the excluded assets from the scope of the land tax, non-inscrutable maintenance costs and installations exempt due to their specific adaptation to an industrial activity. It should be noted that this favorable decision was obtained following a legal dispute led by the tax team of G.A.C. Group, alongside its partner lawyers.
Craft businesses: the importance of equipment does not necessarily dictate the accounting method
The Bordeaux TA (June 4, 2026, No. 2503768) acknowledges the application of Article 1499-00 A of the CGI to an establishment engaged in the manufacture of automotive products. It notes that this activity is among those falling within the artisan sector and that the registration of the company with the Chamber of Trades and Crafts justifies compliance with the headcount requirement when registering it. Although the technical installations, equipment, and tools have a cost exceeding the threshold of €500,000 set out in Article 1500 of the CGI, the establishment must be assessed using the tariff method of Article 1498 of the CGI, in category IND 1.
This decision reminds us that the industrial nature of an activity, in light of the importance of the technical means employed, does not preclude the application of the derogation regime reserved for certain artisan establishments. It is of practical interest for companies engaged in production activities with significant equipment: before adopting the accounting method, it is necessary to verify the conditions specific to Article 1499-00 A of the CGI, notably the nature of the activity and the criteria relating to the artisan enterprise.
Business premises
Comparison evaluation: the differences between buildings must be assessed in concrete terms
Three judgments illustrate the rigor with which the Tribunals assess the appropriateness of the comparative terms used to determine the unrevised rental values. The Nice TA (May 4, 2026, No. 2401519) validates the 30% increase % applied to the rental value of a four-star hotel compared to a three-star hotel selected as the standard unit, taking into account, in particular, differences in standard of living and services provided. Similarly, the TA of Melun (May 26, 2026, No. 2304660) refuses to dismiss a typical premises on the sole ground that its area is much smaller than that of the warehouse to be assessed. The TA of Cergy-Pontoise (June 2, 2026, No. 2400072) adopts a comparable approach for a hospital setting, considering that the significant difference in area with the reference clinic is not sufficient to render the comparison irregular or to justify a 20 % deduction %. Conversely, the TA of Lyon (June 16, 2026, No. 2500750) calls into question the 10% increase % applied to the price of a hotel selected as a comparison term; the differences in location, maintenance and services between the establishments do not justify this adjustment. Finally, the TA of Lille (June 26, 2026, No. 2206551) refuses an additional allowance of 10 % based on differences in situation and maintenance that were insufficiently established at the date of the contested taxes.
These decisions confirm that the comparison is not based on a perfect identification of the properties or on an abstract assessment of their differences. A difference in area, even considerable, is not enough to disqualify a typical property. Conversely, the adjustments made must be justified by objective and sufficiently significant differences. The Lyon Tax Appeals Tribunal’s judgment serves as a useful reminder that this evidentiary requirement also applies to the Administration when applying a surcharge. As for taxpayers, they must prioritize specific and contemporary elements from the years of taxation, rather than old descriptions or simple differences in characteristics.
Weighting of surfaces: the effective allocation takes precedence over the designation
Several judgments rendered in May and June 2026 illustrate the principles recently specified by the Council of State regarding the weighting of the areas of professional premises. The TA of Paris (May 6, 2026, No. 2320137) considers that the traffic routes of a parking lot directly contribute to its primary purpose and must therefore be retained without weighting. This analysis is also followed by the Versailles TA (June 8, 2026, No. 2305284), which refuses to recognize a reduced usage value for the lanes accessible to the public in covered parking lots. The TA of Marseille (May 28, 2026, No. 2306753) adopts a differentiated approach for a retirement home: the reception, reception and relaxation areas normally accessible to residents are part of the main areas, while the rooms reserved for staff and the storage areas can benefit from a weighting of 0.5. Finally, the TA of Lille (June 8, 2026, No. 2309514) refuses to consider that the sanitary facilities, exits and reserves of an office building have, in principle, a reduced value of use, due to a lack of concrete justification.
These decisions must be brought closer in line with the recent jurisprudence of the Council of State, which clearly distinguished the areas allocated to the main activity from those that, although necessary for its operation, perform a different function (EC, 10 November 2025, no. 476 276, SCI Les FC ; CE, December 15, 2025, No. 488 207, St. Charles Foundation ; CE, May 6, 2026, No. 507 828, SAS Logiprime Europe). The mere fact that a surface contributes to the functioning of the establishment is not sufficient to rule out the application of a weighting coefficient. It is necessary to determine whether its use actually corresponds to the main purpose of the premises, assessed in light of its tariff category. This distinction has major practical importance, particularly for logistics warehouses, accommodation facilities and leisure facilities, whose technical, administrative or service areas may benefit from a reduced weighting even though they are essential for operation. Qualification must therefore be based on a precise functional analysis of the spaces, and not solely on their necessity for the operation of the establishment.
Tariff classification: the actual configuration of the premises determines their category
The Administrative Court of Châlons-en-Champagne (May 7, 2026, No. 2501347) confirms the classification of the mail and common areas of a shopping center in MAG 3 category, corresponding to the predominant category of stores served, and not in that of very large surface stores (MAG 5). It also refuses to treat the outdoor parking areas as independent property fractions. Conversely, the Lyon TA (June 16, 2026, No. 2504706) excludes the MAG 3 category for a store located close to other businesses, but with private access and parking, without common facilities or management with the neighboring establishments. It retains the MAG 1 category, corresponding to shops and stores on the street. The TA of Limoges (June 23, 2026, No. 2500595) also applies a classification in MAG 1 to a business located on the edge of an express road, whose visibility and access possibilities justify this classification despite its location in an industrial zone. In another area, the Lyon TA (June 2, 2026, No. 2411294) refuses to classify premises occupied by teaching associations as ENS 1, provided that these organizations carry out their activities under conditions comparable to those of for-profit institutions, particularly with regard to the courses offered and their tax regime.
These judgments prioritize the objective characteristics of the premises and the actual conditions of their operation rather than their mere designation or the legal status of their occupants. The geographical proximity of several businesses is not sufficient to characterize a commercial complex: the existence of arrangements or common organization must be sought. Similarly, the qualification of an educational institution cannot result from the sole associative nature of its operator. These decisions recall the importance of precise documentation of access points, circulation, common spaces, and operating procedures.
Layout and smoothing: the impact of changes affecting the premises after 2017
The Administrative Court of Versailles (7 May 2026, No. 2303876) considers that the cessation of hospital activities in a building, without any modification of its physical characteristics or its consistency, is not sufficient to put an end to the mechanisms of compaction and smoothing provided for in Articles 1518 A quinquies and 1518 E of the CGI. In the same vein, the TA of Cergy-Pontoise (June 5, 2026, No. 2312329) refuses to remove these mechanisms for an entire office tower whose less than 10% % of the area has been converted into dining and sports spaces. It also distinguishes the fractions of property that are eligible for autonomous use from those that remain integrated within the same unit. On the other hand, the TA of Limoges (June 23, 2026, No. 2500595) recalls that a change in use characterized by the transition from one tariff category to another is likely to lead to the termination of these transitional arrangements. Finally, the TA of Lille (June 26, 2026, No. 2202520) holds that the modification of a location coefficient after 2017 must be taken into account in calculating the lump sum applicable to the relevant years, without fixing it based solely on the parameters of the year 2017.
These decisions highlight the need to distinguish material changes, changes in use, and simple evolutions from the evaluation parameters. The cessation or termination of an activity does not necessarily constitute a relevant tax change, while a change in category can have direct consequences on the mitigating mechanisms. The judgment of the Lille Tax Office, on the other hand, provides taxpayers with a favorable clarification: the calculation of the deferral must take into account the location coefficients that are actually applicable to each tax year.
State of deterioration of the buildings: an exemption difficult to obtain and no general allowance for obsolescence
The Administrative Court of Grenoble (May 26, 2026, No. 2409800) maintains the taxation of a former highly degraded university building, provided that the building retains its external walls, part of its floors and its roof. The Versailles TA (June 4, 2026, No. 2405298) adopts a comparable position for an old leisure facility, whose state of abandonment does not demonstrate that major renovation work would be required to render the building unfit for any use. The Lille Administrative Court (TA de Lille) (June 26, 2026, No. 2110095) recalls, for its part, that the revised method of assessing professional premises does not provide for a general 50% reduction % to account for the damage suffered as a result of illegal occupation.
These judgments illustrate the fundamental distinction between the physical state of a building, its inclusion in the scope of the land tax on built properties, and the methods for determining its rental value. A building that has been abandoned or severely deteriorated remains taxable as long as it retains the characteristics of a built property. Moreover, unlike the old method of comparison-based valuation, the revised tariff method does not allow for the free application of a depreciation allowance for obsolescence. Therefore, objections must be based on the criteria expressly provided for by the laws, and not on a general economic depreciation of the property.
Price updates: the regularity of decisions depends on proof of their signature
Two judgments of the Versailles Administrative Court, delivered three days apart, provide additional details regarding the formal requirements applicable to decisions updating the parameters for evaluating professional premises. In the first (May 4, 2026, No. 2601686), the Court holds that the decisions taken pursuant to Article 1518 ter CGI must comply with the requirements of Article L. 212-1 of the Code of Public Relations with the Administration, notably regarding the signature and identification of the author. It thus penalizes the absence of justification for the regular signature of the contested decisions. In the second judgment (7 May 2026, No. 2602173), the same Tribunal rejects an objection concerning the electronic signature of a tariff update decision, since the Administration justifies the use of a procedure that enjoys a presumption of reliability that the applicant fails to refute.
These two decisions highlight that the formal regularity of tariff update decisions constitutes a real contentious issue, without, however, systematically imposing a handwritten signature. The issue lies in the Administration’s ability to justify the existence of a regular signature, including electronic one, and the identity of its author. For taxpayers, the verification of the published decisions and, if applicable, the request for the original documents or elements attesting their signature can constitute useful steps in the context of a challenge (see ECJ, 15 July 2025, no. 491 157)., SA Aéroports de Paris).
Fractional ownership: the autonomy of use is appreciated independently of commercial exploitation
The Paris TA (May 6, 2026, No. 2320137) acknowledges that parking spaces located in the basement of an office building constitute fractions of property normally intended for a separate use, even when they are not subject to autonomous commercial exploitation. Conversely, the TA of Châlons-en-Champagne (May 7, 2026, No. 2501347) refuses the separate assessment of outdoor parking areas that are integrated into the operation of a commercial complex.
These decisions urge against confusing the autonomy of use with the autonomy of commercial exploitation. A parking lot can constitute a separate fraction of ownership without being exploited as a paid public park (CE, 15 February 2016, no. 381 911, Cum Paritalie CompanyHowever, its separate assessment is not automatic: it requires a practical assessment of its configuration and its functional relationship with the other premises. This distinction can have important consequences on the tariff classification and the rental value chosen.
Property and taxation: a sale not published remains unenforceable against the Administration
The Administrative Court of Versailles (May 7, 2026, No. 2204840The court holds that a company that sold part of its real estate estate in July 2017 remains liable for the corresponding real estate tax for the years 2018 and 2019, since the deed of sale was not published in the Land Registry Service until March 2019. Pursuant to Articles 1402, 1403 and 1415 of the CGI, the transfer was therefore not enforceable against the Administration at the dates of the events giving rise to the contested taxes.
This judgment recalls the tax consequences of a failure to publish land records, even when the sale has legally taken place between the parties. It emphasizes the importance of verifying not only the date of signing the cession documents, but also the date of their effective publication, particularly when contesting taxes levied after a division or partial cession of a whole real estate property.
Ancient evaluation methods: the relevance of historical references remains decisive
The Paris TA (June 23, 2026, No. 2316368) authorizes the use of a commercial unit located in the same real estate complex as the property to be appraised, after applying an adjustment to take into account their difference in area. It excludes, in particular, another comparison term whose characteristics had been profoundly modified by renovations. The TA of Versailles (June 25, 2026, No. 2310436) recalls, for its part, the rules governing the direct valuation method, notably the search for data enabling the determination of a value that is as close as possible to 1er January 1970. He rejects the criticisms directed at the updating indices selected by the Administration, citing insufficient evidence of their erroneous nature.
These decisions confirm that the unrevised rental values continue to raise significant technical difficulties, particularly when they are used in the calculation of transitional arrangements. The validity of a typical premises requires verifying the permanence of its characteristics, while direct assessment requires a methodical search for available historical references. In both cases, the challenge must be based on precise elements that allow the parameters actually selected to be called into question.
Residential premises
Special situation coefficient: the disadvantages can be offset by the benefits of the property
The Administrative Court of Lyon (June 2, 2026, No. 2413288) rejects the appeal regarding the special situation coefficient applied to a house located near an industrial zone. Although the Tribunal acknowledges that the installation of a tar depot and the development of artisanal activities have generated additional nuisances, notably noise, it considers that these are compensated by the advantages resulting from the house’s good exposure, its location on a hill, its very limited immediate vicinity, and the importance of its land. It thus confirms the application of a special situation coefficient of «0», corresponding to an ordinary situation in which the advantages and disadvantages are balanced. It also specifies that the swimming pool constitutes a taxable outbuilding, regardless of its state of maintenance at the 1er January of the tax year.
This judgment illustrates the overall nature of the assessment of the special situation coefficient. The existence of new nuisances, even if established, does not necessarily justify a reduction in the rental value when the property also benefits from advantages that are likely to compensate for them. It also recalls the distinction between the general situation coefficient, which reflects the environment of the neighborhood or commune, and the special situation coefficient, which takes into account the specific characteristics of the property’s location. Finally, the possible deterioration of a swimming pool is not sufficient in itself to exempt it from the property tax on built properties.
Article written by:
Valdese NO – Expert in local taxation
Valdese assists clients in the analysis, securitization, and optimization of their local taxes, particularly in the areas of rental values and associated reporting tools. A holder of a Master’s degree in Corporate Taxation from the University of Paris-Dauphine and a Master’s degree in Economic Law from Sciences Po Paris, she brings together dual legal and financial expertise to offer precise analyses tailored to operational issues. Her rigor, analytical ability, and proficiency in data manipulation enable her to contribute effectively to local tax audit, litigation, and advisory missions.
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