When dealing with an inheritance, determining the value of the property being transferred is both essential and highly sensitive. Should you declare a lower value to reduce inheritance tax? Or, on the contrary, increase its value? Neither option is advisable. Underestimating or overestimating a property for inheritance purposes are both costly mistakes that can have serious consequences for heirs.

In this article, we explain why both approaches are risky, what motivates some people to consider them, the tax, financial and family consequences they may trigger, and above all why obtaining an accurate property valuation remains by far the safest way to secure the transfer of an estate. Information updated for 2026.

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In summary

The property's true market value is the only valid reference: on the date of death, the property must be declared at its actual market value—no more, no less.
Underestimating a property is risky: it may lead to a tax reassessment (additional inheritance tax, late-payment interest and penalties of up to 40%, or even 80% in cases of fraud) while also increasing the taxable capital gain when the property is eventually sold.
Overestimating a property is equally problematic: it results in unnecessarily high inheritance tax (and potentially Wealth Tax on Real Estate), makes the property harder to sell and can create imbalances between heirs.
An accurate valuation is always the best option: it secures the inheritance declaration, optimises future taxation and helps preserve family harmony.
The right approach? A well-documented valuation supported by a professional valuation report.

Why is the property's value so important in an inheritance?

Everything starts with one simple but fundamental principle.

The market value on the date of death: the basis for everything

For inheritance purposes, French law requires each property to be declared at its true market value, meaning the price it could reasonably have achieved on the open market on the date of death.

This value forms the basis for calculating inheritance tax, which is determined using a progressive tax scale after applying the relevant allowances (for example, a €100,000 allowance between each parent and child in the direct line of succession).

In other words, the declared value directly determines the amount of inheritance tax payable—which explains why some people are tempted to manipulate it. This temptation should be firmly avoided.

Inheritance declaration: six months to determine the correct value

In most cases, heirs have six months following the date of death to file the inheritance declaration.

During what is often an emotionally difficult period, the property valuation should never be rushed. An inaccurate valuation—whether too low or too high—may create significant problems for heirs many years later.

Key takeaway

The inheritance declaration must be based on the property's actual market value on the date of death.
It must generally be submitted within six months, making it essential to organise the valuation early rather than leaving it until the last minute.

Underestimating a property for inheritance purposes: temptation and risks

Let's begin with the most common situation: declaring a lower property value.

Why are some heirs tempted to underestimate a property's value?

The reasoning appears straightforward: the lower the declared value, the lower the inheritance tax.

Declaring a property worth €350,000 as being worth €280,000 immediately reduces the taxable amount.

Given that inheritance tax can sometimes be substantial, underestimating a property's value may initially seem like an attractive way to save money.

In reality, however, it is a very short-sighted strategy.

The risks: tax reassessment, late-payment interest and penalties

The French tax authorities have extensive auditing powers and systematically compare declared property values with actual market prices, particularly through the DVF (Demandes de Valeurs Foncières) property sales database.

If they conclude that a property has been undervalued, they may launch a tax reassessment.

This may include:

Reassessment of the property's market value.
Payment of additional inheritance tax.
Late-payment interest (currently around 0.20% per month, or 2.4% annually).
Financial penalties.

These penalties may reach 40% in cases of deliberate understatement and up to 80% in cases involving fraudulent behaviour.

Furthermore, depending on the circumstances, the tax authorities may carry out these checks for several years after the inheritance declaration—sometimes for as long as six years.

The hidden downside: higher capital gains tax when selling

This is probably the most underestimated consequence.

The value declared for inheritance purposes becomes the property's acquisition value when calculating any future capital gain.

Declaring a lower inheritance value therefore automatically increases the taxable capital gain when the property is eventually sold.

This gain may be subject to:

19% capital gains tax
17.2% social contributions

A combined rate of 36.2%, before any allowances linked to the length of ownership.

As a result, the apparent saving made on inheritance tax is often lost—and sometimes exceeded—when the property is eventually sold.

Family disputes and inheritance fraud

Another major risk is family conflict.

Where several heirs jointly own the property, one heir buying out the others based on an artificially low valuation directly disadvantages the remaining beneficiaries.

Even more seriously, a deliberate and concealed undervaluation may constitute inheritance fraud, exposing the person responsible to significant civil penalties.

Key takeaway

Underestimating a property may lead to a tax reassessment (additional inheritance tax, interest and penalties of up to 40–80%).
It also increases future capital gains tax and may trigger family disputes or even inheritance fraud claims.

Overestimating a property for inheritance purposes: a false good idea

Conversely, inflating a property's value may appear to be a clever strategy in certain situations. In reality, it is just as counterproductive.

Why do some people choose to overestimate a property's value?

Several reasons may lead heirs to overvalue a property for inheritance purposes.

Some hope to increase the property's acquisition value in order to reduce future capital gains tax if they intend to sell it later. Others overestimate the property out of emotional attachment to the family home, excessive optimism, or because of disagreements between co-heirs.

Here again, however, the strategy often backfires.

Paying too much inheritance tax (and Wealth Tax on Real Estate)

The consequence is immediate: an inflated property value increases the taxable base used to calculate inheritance tax.

As a result, heirs pay more inheritance tax than necessary from the outset.

Where the inherited estate is substantial, an overvaluation may also increase the heirs' liability for French Wealth Tax on Real Estate (IFI).

In short, heirs pay more tax without receiving any corresponding benefit.

A property that becomes difficult to sell—and a capital loss that cannot usually be deducted

Overestimating a property also creates problems when it comes time to sell.

A property listed above its true market value generally attracts fewer viewings, remains on the market longer and ultimately requires significant price negotiations.

If it is eventually sold for less than the value declared in the inheritance, the resulting capital loss is generally not tax deductible.

In other words, heirs cannot recover the inheritance tax they paid on the inflated valuation.

It is therefore a double penalty.

Imbalances between heirs when buying out shares

When several heirs jointly own a property, an overvaluation has the opposite effect of an undervaluation.

This time, the heir wishing to buy out the others must pay an excessively high settlement based on an artificially inflated property value.

Once again, this situation can easily lead to disputes within the family.

Key takeaway

Overestimating a property results in unnecessarily high inheritance tax (and sometimes Wealth Tax on Real Estate), without providing any real advantage.
It makes the property harder to sell at the asking price and creates unfairness when dividing the estate between heirs.

Whether under- or overestimated, the tax authorities remain vigilant

Whether a property's value is declared too low or too high, one principle always applies:

The declared value must be justifiable.

The French tax authorities compare inheritance declarations with actual comparable sales recorded in the same area, taking into account the property's size, condition, location and overall characteristics.

A significant discrepancy—whether upward or downward—is likely to attract attention and may trigger a tax audit.

The safest strategy is therefore neither to declare a particularly low value nor an artificially high one, but rather to be able to demonstrate that the declared value genuinely reflects market conditions.

This is precisely why obtaining a reliable, well-documented valuation is so important.

Best practices for obtaining an accurate inheritance valuation

How can you ensure the declared value is secure?

A few simple principles make all the difference.

Base the valuation on true market value and comparable sales

Everything starts with the market.

A reliable valuation is based on recent comparable sales involving similar properties in the same area, adjusted according to factors such as:

Living area
Overall condition
Orientation
Floor level
Energy Performance Certificate (EPC/DPE)
The property's strengths and weaknesses

The objective is not to determine an "ideal" selling price but rather the property's actual market value on the date of death.

Keep a written valuation report

If the tax authorities carry out an audit, supporting evidence becomes essential.

A detailed written valuation report, accompanied by comparable sales data and property diagnostics, provides strong evidence to justify the declared value.

It also reassures all heirs that the valuation is objective and properly supported.

These documents should therefore be kept safely.

Seek advice from a property professional

Valuing a property for inheritance purposes should never be improvised.

Using a qualified real estate professional or property expert provides an impartial, accurate and defensible valuation.

An independent opinion also helps preserve family harmony.

The value is no longer simply "one heir's opinion" but an objective market assessment supported by professional evidence.

Key takeaway

Base the valuation on genuine market comparables and a written professional valuation report.
A property professional provides neutrality, accuracy and valuable protection in the event of a tax audit.

Why an accurate property valuation is always the best solution

After reviewing the various risks, one conclusion is clear: an accurate valuation is the only winning strategy.

It secures the inheritance declaration while minimising the risk of tax reassessment, late-payment interest and financial penalties.

It also optimises future taxation by establishing a realistic acquisition value, thereby avoiding an artificially inflated taxable capital gain if the property is sold later.

An accurate valuation also helps preserve family harmony by providing all heirs with an objective, impartial and indisputable basis for dividing the estate or calculating any buyout between co-heirs.

Finally, it saves both time and stress during what is already a difficult period.

Neither underestimating nor overestimating a property's value protects heirs. Declaring its true market value does.

Estimate your property at the right price with Optimhome

Given the financial and legal implications, it is always preferable to rely on trusted tools and experienced professionals.

Optimhome offers two complementary levels of support.free Optimhome online property valuation tool

To begin with, the provides an initial price range for your house or apartment in just a few minutes. It offers a useful starting point for approaching an inheritance with realistic expectations.

For a more accurate assessment, an Optimhome real estate advisor can carry out a comprehensive property valuation, including a detailed valuation report based on:

A thorough analysis of the property.
Comparable market sales.
The property's overall condition.
Its Energy Performance Certificate (EPC/DPE).
Local market characteristics.

This detailed and well-documented report is particularly valuable for supporting your inheritance declaration and providing reassurance to all heirs involved.

Start by requesting a free online property valuation.

Then arrange a comprehensive valuation with an Optimhome real estate advisor near you.

Conclusion

The true market value on the date of death is the only legally recognised and reliable basis for an inheritance declaration.

Underestimating a property's value exposes heirs to tax reassessment and increases future capital gains tax when the property is sold.

Overestimating it results in unnecessarily high inheritance tax and makes both the sale and the division of the estate more complicated.

A fair, well-supported valuation secures the inheritance process while helping preserve family relationships.

Optimhome supports you every step of the way—from an initial online valuation to a comprehensive professional valuation report.

Should you decide to sell the inherited property, you can also rely on your local Optimhome real estate advisor, whose knowledge of the local market will help you achieve the best possible selling price within the shortest timeframe.

FAQ

Can I underestimate a property's value to reduce inheritance tax?

This is strongly discouraged.

Underestimating a property for inheritance purposes can easily be detected by the French tax authorities, who may carry out a tax reassessment.

This may result in:

Additional inheritance tax being due.
Late-payment interest.
Penalties of up to 40%, or even 80% in cases of fraud.

Furthermore, declaring a lower inheritance value automatically increases the taxable capital gain when the property is eventually sold.

What are the risks of overestimating a property in an inheritance?

Overestimating a property's value for inheritance purposes leads to unnecessarily high inheritance tax—and potentially higher French Wealth Tax on Real Estate (IFI)—without offering any real tax advantage.

It also makes the property more difficult to sell at the advertised price and may distort the division of the estate or the calculation of buyout payments between heirs.

How is a property's value determined for inheritance purposes?

The valuation is based on the property's true market value on the date of death.

This corresponds to the price the property could reasonably have achieved on the open market, determined using comparable recent sales together with the property's characteristics, including:

Floor area
Overall condition
Energy Performance Certificate (EPC/DPE)
Location

This market value forms the basis for calculating inheritance tax.

What happens if the tax authorities audit an inheritance declaration?

If the tax authorities consider the declared value to be inaccurate, they may reassess the property's value and require payment of:

Additional inheritance tax.
Late-payment interest (currently around 0.20% per month).
Financial penalties where appropriate.

They may carry out these checks several years after the inheritance declaration has been submitted, making it essential to ensure the declared value is properly supported from the outset.

Why should I ask a property professional to value an inherited property?

Because a detailed written valuation report provides strong supporting evidence in the event of a tax audit.

It secures the inheritance declaration while providing all heirs with an objective and impartial basis for determining the property's value.

It is also one of the most effective ways to avoid both tax reassessments and family disputes.

Information current as of the publication date (2026). This article is provided for general information only and does not constitute personalised legal or tax advice. Tax regulations relating to inheritance may change over time. For advice specific to your circumstances, consult your notary and an Optimhome real estate advisor.