To better understand how to include property under construction in the IFI return, let’s look at a practical case study:

Let’s assume that Mr Dupont has acquired a property under construction, called “VILLA D”. The purchase price stated in the deed of sale is 1.5 million euros, including both the land and the buildings.

To declare this property in his IFI return, Mr Dupont must follow the steps below:

1. On the assets side, in Appendix 2 of his IFI return, he will enter the total purchase price mentioned in the deed of purchase, i.e. 1.5 million euros.
2. On the liabilities side, in Annex 4 of his IFI return, Mr Dupont should mention two items:
   1. Amounts still owed to the developer on 1 January 2023. This will include the amount of the purchase price less any deposits already paid on that date. For example, if Mr Smith has already paid €200,000 in instalments, he will indicate the balance still owing to the developer in this section.
   2. The amount of borrowed capital still to be repaid on 1 January 2023. If Mr Smith has borrowed €1.2 million to finance the purchase of the property, he will indicate the amount of capital still owed on 1 January 2023.

It should be noted that in some cases it may be difficult to estimate the value of the land and buildings separately, especially if the deed of purchase does not set out the total price separately. In these situations, it is acceptable to declare the total purchase price as stated in the deed of purchase.

It is essential to provide this information clearly and accurately on the IFI return, in accordance with the relevant schedules.

This approach will make it possible to report the inclusion of properties under construction in the IFI return in a transparent and educational manner.

To help you with your returns, you can call on our teams.