French Tax Authorities Use Google’s AI to Go After Undeclared Swimming Pools

Using an algorithm developed by Google and technology consulting firm Capgemini, France’s Ministry of Economy and Finance has begun inspecting aerial images of residential lots and taxing homeowners accordingly. Add-ons like swimming pools, verandas, and home extensions all have the potential to increase the value of a property, resulting in increased taxes. Despite the fact that such add-ons are required to be reported within 90 days of completion, however, most aren’t. Some homeowners simply forget in the chaos of modifying their homes; others, it can safely be assumed, might want to avoid footing a larger tax bill.

Whether by accident or on purpose, these tax avoidances are no longer in the hands of individual homeowners. The Google-Capgemini AI combs aerial photographs (likely from Google Earth) and compares observations with land registry databases to capture previously undisclosed add-ons. Since it began experimenting with the algorithm about a year ago, the ministry has found 20,356 pools—and that’s only in a few select areas of the country.

The algorithm isn’t perfect. According to officials who spoke with French newspaper Le Parisien, the Google-Capgemini AI sometimes snags small, inconsequential structures like dog houses or children’s playhouses. Earlier this year the algorithm had an abysmal (at least for the authorities) 30 percent error rate, often mistaking reflective solar panels for swimming pools and missing add-ons that happened to be partly hidden by shadow. It’s since improved and has entered a “second stage of research.” The ministry says the algorithm will soon be able to detect whether a property is empty and therefore not being taxed.

The practice echoes US insurance companies’ relatively new use of drones to observe insured parties’ homes. Last year homeowners began receiving letters from their insurance companies indicating that their roofs, which had been photographed by drone, were outdated and needed to be replaced if coverage were to continue. Some insurance companies even used the information gathered to drop homeowners entirely. Since then, providers have been known to spy on insured parties to make sure they don’t have hot tubs or pools (which raise a homeowner’s premium) in their backyards.

France will soon use the Google-Capgemini AI in all areas of the country, bringing in an extra €40 million in new taxes per year.

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