Selection of administrative court rulings

The Administration argues that the standard premises proposed by the claimant have been completely restructured since they were duly entered in the Onet-le-Château commune's land review report and that, under these conditions, the standard premises cannot be considered relevant for the comparative assessment of the rental value of the premises in question. As this was not one of the reasons given by the Administration for rejecting the applicant's claim, it must be considered as having requested a substitution of grounds. The company was given the opportunity to comment on this request for substitution. It is clear from the investigation, as the tax authorities point out, that the standard premises no. 28 proposed by the applicant has been, since it was duly recorded in the minutes of the property revision operations of the commune of Onet-le-Château and prior to the tax years in dispute, split into five separate premises, referenced under the invariants 1760201478, 1760203881, 1760203882, 1760203883 and 1760215423, with a surface area of 368, 280, 144, 672 and 150 m² respectively, and that these premises house different activities. As a result, the standard premises proposed by the applicant have been completely restructured and have undergone a change of use, so that they cannot be used as a relevant basis of comparison for assessing the rental value of the building in question. As a result, the tax authorities would have rejected his claim if it had initially been based on this new ground, based on the situation existing at the time of the disputed tax years. Consequently, the Administration's request for a change of grounds should be granted, as it does not deprive the company of a guarantee.

Although the applicant company maintains that the road surfaces of its parking lot, with a surface area of 3,402 m² on a parcel with a total surface area of 8,690 m², should be subject to a reduction coefficient of 0.2, there is no reason to attribute a reduced use value to these parts of the building, as all the land and grounds, which form part of the same topographical grouping and are normally intended to be used by the same occupant, could have led the Administration to consider that the main activity justifying the application of the DEP1 category scale was being carried out there, without any reduction for traffic areas which it has not been established would have had a reduced use value in relation to the main use, access to which can only be via the disputed roads, as these constitute an element directly necessary to the activity of the user company.

The building in dispute, occupied by a sofa store until the death of the manager on July 10, 2021, was acquired on November 18 by the applicant company. While the latter claims, without being contradicted on this point, that it had itself intended to use the building for commercial purposes, it is clear from the deed of sale that, having been informed of the condition of the building, in particular the state of the concrete where the presence of termites had been detected, it undertook to carry out major renovation work, construction of a 600 m² roof, creation of a 300 m² surface area, installation of sanitary facilities, elevators and 100 m² of bay windows, and complete overhaul of the electrical installations, leading to the production of a new building within the meaning of 2° of 2 of article 257 of the CGI within four years. According to the estimate dated November 8, 2023, these works, which are expected to add considerable value to the building, will involve the conversion of four apartments. The said works, foreseeable at the time of acquisition of the property, cannot, in the circumstances of the case, be considered as having resulted in a vacancy beyond the owner's control within the meaning of I of article 1389 of the CGI. The fact that, within the four-year timeframe envisaged for this work, the report of an engineering firm submitted in August 2023 specified the dangers for the public of the concrete superstructure is irrelevant in this respect.

The applicant company maintains that the premises in question, taxed under category 2 of sub-group II, should have been taxed under category 3 of the same sub-group. It points out that the premises, used by the occupant to provide commercial services consisting of offices, workspaces and common areas specially fitted out to receive customers (coworking), have a specific layout characterized by an «over-representation of common areas» such as a herbal tea room, mothers' room, wellness room, relaxation areas, events area and barista area. However, it is clear from the investigation that the company has not provided any documentary evidence of the specific layouts of the premises on January 1, 2022 and January 1, 2023. Consequently, it has no grounds for claiming that the French tax authorities wrongly classified the property in category 2 of sub-group II for the years 2022 and 2023. Secondly, the claimant maintains that the sanitary facilities and changing rooms, corridors and emergency exits, workshops, archives and storerooms, social premises, technical premises and security control rooms, storerooms, cellars and basement corridors have a reduced use value and should be subject to a coefficient equal to 0.5 in application of the provisions of article 324 Z of Appendix III to the CGI. However, the company has not provided any documentation establishing the consistency, location and use of the disputed surfaces, enabling the judge to assess the legality of the weighting coefficient applied to them.

In the absence of any comparable standard premises in the commune of Bassens, the comparative valuation of the hypermarket in question, with a weighted surface area of 9,592 m² at the date of the 1970 rental value valuation report, is geographically located in the immediate vicinity of the commune of Chambéry, three kilometers from its city center, The two towns border on each other, are accessible by public transport, and are on a major travel route leading to the popular Savoyard ski resorts, which attract a large number of tourists. The property is also accessible from the A43 freeway to Albertville and Turin, linking Chambéry to Grenoble, and is highly attractive both locally and to tourists. By way of comparison, the tax authorities have used the C n° 11 premises listed in the 6670 ME report for the Villefranche-sur-Saône municipality, which corresponds to a large-scale retail outlet, and not a small local supermarket in a small isolated community, as the applicant company wrongly maintains. Its business activity is similar to that of the premises to be appraised. With a weighted surface area of 2,747 m², admittedly smaller than that of the hypermarket in dispute, valued by lease at a unitary value of 16.31 euros per m², it is located in the commune of Villefranche-sur-Saône, whose population, according to INSEE data (36,000 inhabitants), is higher than that of Bassens (4,625 inhabitants), and close to the A6 freeway on the Lyon-Paris route. This situation reflects an economic potential comparable to that of the Bassens hypermarket, notwithstanding the difference in surface area, which is not the case for the standard premises no. 18 shown in the ME minutes for the commune of Barberey-Saint-Sulpice in the Aube department, proposed by the applicant, initially operated under the Mammouth banner and at the date of the disputed imposition under the Géant Casino banner, whose location at a distance from the city of Troyes, in a commune with a population of less than 1,500, and whose number of dwellings, households and jobs, according to INSEE comparator data, presents neither the same economic potential and potential clientele, nor the same commercial appeal as the standard premises in Villefranche-sur-Saône, whose commercial appeal is far superior. For these reasons, the applicant's request to replace the standard premises appears inappropriate. It follows from the investigation that the standard premises selected by the tax authorities, in view of its location in a dynamic economic and employment zone comparable to that of the premises in dispute on the immediate outskirts of the Chambéry conurbation, is appropriate to serve as a basis of comparison for the valuation of the latter.

The applicant company cannot claim that the 31 m² surface area, corresponding to the washrooms, corridor, dining room and archives which, in terms of use value, form an integral part of the office premises in question, would justify, for the determination of the rental value of the latter, the application of the 0.5 reduction coefficient provided for covered surfaces in article 324 Z of Appendix III to the CGI. Under these conditions, the use value of this part cannot be considered to be lower than that of the office part, corresponding to the main use of the premises, with regard to the rent that the property as a whole could generate if it were let. Consequently, the tax authorities were right to include this 31 m² surface area in the weighted surface area used to determine the rental value of the applicant's business premises.