Discounts in real estate valuation — comparative analysis France vs Morocco

French jurisprudence recognises that « undivided rights have their own value that differs from the mere fraction of the asset's total market value corresponding to the proportion of undivided rights » (Cass com Fayard 19 June 1990, Bendel 15 Dec 2009, Leflaive 14 Dec 1999). The logic: the need for unanimous co-owner agreement on disposal acts reduces asset liquidity and imposes management constraints. Discount range retained by French judges: 10 to 20 %, exceptionally 30 % for a château held jointly with multiple heirs.

Application in Morocco:jointly-held assets (family Moulkia, post-death succession joint ownership, acquisition joint ownership) methodologically benefit from a similar discount. ReaConsult generally applies 10 to 15 % for stable family joint ownership, 15 to 25 % for conflictual or multi-heir MRE joint ownership with co-owners residing across several countries. The discount accounts for the joint ownership's presumed duration and the practical difficulty in organising a swift sale.

French jurisprudential limit:the Supreme Court refused the discount for « de facto joint ownership without management difficulty » (Cass com 27 March 2019 on separation-of-assets spouses, Cass com 30 Sept 2020 on conflict-free mother-son joint ownership). In Morocco, ReaConsult documents the joint ownership's economic reality before applying a discount — no automatic discount.

Under French law, the scale of article 669 CGI sets the usufruct/bare ownership share according to the usufructuary's age (USU = 70 % of full ownership if usufructuary < 21, decreasing to 10 % if > 91). Debated question: does the usufructuary's actual occupancy reduce bare ownership value beyond the scale? The Supreme Court has oscillated: yes in Poirel (Cass com 12 May 2004), again yes in Bendel (Cass com 15 Dec 2009), not explicitly in Leusse de Syon (Cass com 27 Oct 2009). Application in Morocco:Morocco has no tax scale equivalent to art. 669 CGI. ReaConsult applies the RICS economic methodology: usufruct value = capitalisation of net rental income over the usufructuary's life expectancy (public mortality tables); bare ownership value = full ownership value − usufruct value. If actual usufructuary occupancy (no rental income), valuation by theoretical net rental value.

Under French tax law, the property occupied by its owner benefits from flat rebates:

IFI: 30 % rebate on the taxpayer's main residence (art. 973 CGI, ex-art. 885 S, raised from 20 to 30 % by the TEPA law of 21 August 2007).

Succession duties: 20 % rebate on the value of the property constituting the deceased's main residence when also occupied by the surviving spouse or minor children (art. 764 bis CGI, law of 30 Dec 1998).

Donation duties: no rebate — article 761 al. 2 CGI imposes valuation « free of any occupancy » when the owner has use.

Application in Morocco: there is no legal rebate equivalent in Morocco — neither for property tax, nor for registration duties, nor for TPI. ReaConsult cannot mechanically apply the 30 % of art. 973 CGI on a Moroccan appraisal. However, in the context of an IFI report for a French-tax-resident MRE — where the Moroccan property is actually a secondary residence — the 30 % main-residence rebate does not apply anyway (main residence is in France). For the economic valuation of owner occupancy (impact on resale liquidity), ReaConsult applies case-by-case methodological analysis.

French jurisprudence consistently considers that an existing lease justifies a capital loss on market value — including for an income-producing building where the lease could have been seen as an asset (Cass com Sipea 7 Feb 1989, Cass com Cabrol 23 Oct 1984, Cass com GFA de Plaimpied same date). Logic: the future buyer is deprived of full enjoyment of the asset until lease termination. Discount based on residual duration, lease type (commercial Law 49-16 vs residential Law 67-12 vs verbal), and gap between current rent and market rent.

Application in Morocco: ReaConsult methodologically applies this discount:

· Long commercial lease Law 49-16 (medical practice, established restaurant) with renewal right and potential eviction indemnity: 10-20 % discount by context.

· Long residential lease Law 67-12 with below-market rent: 5-15 % discount.

· Short-term lease (Airbnb): negligible discount, even a premium if documented income.

· Occupancy without title (inherited un-regularised occupancy, occupancy in fact): high discount 25-40 %, sometimes asset excluded from market value and shifted to forced-sale value.

This is the most slippery ground of French jurisprudence. The GFA de Plaimpied 1984 definition cites « the deed of sale clauses » as a market value factor, which logically includes a prohibition to alienate or mortgage. But the Supreme Court refused this discount in the Leusse de Syon ruling (Cass com 27 Oct 2009) and the Gerber ruling (Cass com 11 Sept 2012), considering that « the limit placed by the donor on the freedom to alienate a property whose usufruct he reserves does not affect its market value ». Position criticised by doctrine (F. Douet, S. Quilici): an inalienable asset has, by definition, no exchange value. Application in Morocco:in the context of a Moroccan donation (Hiba in particular) with an inalienability clause, ReaConsult applies a moderate discount (5-15 %) if the clause is temporary and of determined duration, higher (15-25 %) if the clause extends over the donors' entire life.

French tax doctrine admits that residences and buildings listed as historical monuments are « in a particular situation due to their specific nature, the often heavy charges burdening them, the limited number of potential buyers and the resulting difficulties in selling them » (BOI-ENR-DMTG-10-40-10-10 no. 50). The Supreme Court applied a 30 % discount to a jointly-held listed château (Cass com d'Oultremont 12 Feb 2008). Application in Morocco: heritage-listed riads in medinas (Marrakech, Fez, Tetouan), early 20th-century Anfa heritage villas, restored Atlas kasbahs, properties in protected areas subject to strong planning restrictions — all methodologically eligible for an illiquidity and maintenance-charge discount. ReaConsult typically applies 15 to 30 % by context.

French jurisprudence admits cumulating several discounts — the Leusse de Syon ruling mentioned three cumulated discounts by the Court of Appeal (20 % joint ownership + 15 % inalienability + 20 % family occupancy), even though the Supreme Court partially reversed. In Morocco, ReaConsult applies cumulation with discernment: avoid double-counting the same factor (e.g. not joint-ownership discount AND third-party occupancy discount on the same occupying co-owner), document each discount distinctly, and cap total cumulation typically at 35-40 % of full ownership except for exceptional cases (listed monument + multi-MRE-heir joint ownership for example).

• Document each legal factor factually (deed, title, lease)
• Verify economic reality of the factor (no theoretical discount)
• Calibrate ranges on RICS methodology, not FR scales
• Cap total cumulation typically at 35-40 %
• Justify each discount in the report (comparable reference, jurisprudence)
• Adapt to fiscal use context (Morocco succession vs French IFI)
• Re-test consistency with full ownership reference value

• Automatic discount without economic documentation
• Application of French percentages in Moroccan law
• Mechanical cumulation without consistency test
• Discount on factor already integrated in the usufruct scale
• « Compliant » discount to reduce tax base
• Discount without cross-check by subsidiary method
• Discount on current lease without residual-duration check