THE Socialist candidate in France’s presidential election is expected to face questions this week about the value of her house on the Riviera, as the campaign to replace Jacques Chirac is overshadowed by claims of tax dodging, sleaze and dirty tricks.

Ségolène Royal, the first woman with a real chance of becoming French president, is suspected of undervaluing her holiday home on the Côte d’Azur in order to lower her tax bill. The matter is the subject of an investigation to be published in the press on Wednesday.

Royal acquired the property two decades ago with François Hollande, her common-law spouse. It attracted attention when the couple were forced to acknowledge this year that they pay “wealth tax”, an embarrassing admission for Socialist politicians in a country whose complicated relationship with money is a legacy of the revolution.

The couple paid £110,000 for the house in the picturesque village of Mougins in 1986. For the purpose of calculating their liability for wealth tax, they estimated its value last year at £180,000, much to the amusement of local estate agents who say that with its breathtaking view, large garden and swimming pool, the house could fetch £875,000, almost five times as much.

Such a discrepancy — representing a potential tax saving of thousands of pounds — is especially embarrassing for Hollande, who has advocated tax rises and once famously declared on television: “I don’t like the rich.”

It is no less damaging for Royal, who insisted that all her financial affairs were “transparent” and that “there is no revelation to make”.

She has accused supporters of Nicolas Sarkozy, the centre-right candidate and her chief rival for the presidency, of a dirty tricks campaign to undermine her. When details of her personal finances were made public on a website in January, she denounced the “thuggish methods” of her opponents.

Yet the financial affairs of Sarkozy, the interior minister, have also been subject to unwelcome scrutiny. He was accused last week of accepting a hefty discount from the developer of a luxury riverside complex when he was mayor of the affluent Paris suburb of Neuilly in 1997.

He dismissed as a “smear” the claims in Le Canard Enchaîné, the investigative weekly paper preparing to publish details of Royal’s property transactions.

Even so, his effort to depict himself as a man of modest means will have been damaged by news that he made a profit of £670,000 when he sold the flat last November. He has also acknowledged being subject to wealth tax, which kicks in on assets above £500,000.

The Royal house in Mougins, a medieval village 15 minutes’ drive from Cannes, is where the candidate likes to spend her summer holidays with family and friends. She was famously photographed on the beach near there last August in her bikini.

The village has always been popular among artists and celebrities, including the singer Edith Piaf and Pablo Picasso, the painter, who spent the last 15 years of his life in Mougins. Yves Saint Laurent, the fashion designer, and the actress Catherine Deneuve have also lived in the village. Winston Churchill painted watercolours there.

Mougins estate agents estimated the value of La Sapinière (fir plantation), as Royal’s property is known, at between £670,000 and £875,000. “Houses that size on even smaller bits of land can go for up to €1.3m [£875,000], perhaps even more,” said Guy Thill of Azure Contact, an agency in Mougins.

Wealth tax is calculated as a percentage, ranging from 0.5% to 1.5%, of assets above the threshold, with the lowest rate applying to the principal residence. Royal and Hollande paid £580 last year.

However, if they had estimated the value of the Mougins property at £875,000, they could have been liable to pay up to £10,000 more per year in tax. Besides the house in Mougins, the couple own a big ground-floor flat in Paris that they bought for £600,000 in 1990. They set up a family property company, in which Hollande’s parents have shares, to make the purchase — a perfectly legal way of cutting wealth tax liability.

In 2003 they used the same company to buy a house in the Poitou-Charentes region, where Royal is president, for £110,000.

Modern French history is rich in cases of politicians dogged by property transactions, from François Mitterrand, the former president who housed his mistress and illegitimate daughter in a sumptuous state apartment in the centre of Paris, to Alain Juppé, a former prime minister whose son was given a luxury council-owned flat at low cost.

Hervé Gaymard had to resign as finance minister after just hours in the job in 2005 when it was revealed he was charging the state £6,700 in rent for a flat near the Champs Elysées instead of living in a smaller official home.

Sarkozy reacted with fury to the claims that he was given a £200,000 discount on a property in the richest Paris suburb when he was its mayor. The large duplex and garden were part of a development to which Sarkozy had given his mayoral approval.

The developer paid half the cost of modifications requested by Sarkozy and his wife, Cécilia, including the installation of an oak staircase and 50 yards of shelving and cupboards.

Royal supporters dismissed the controversy over the Mougins house as part of a campaign to discredit the Socialist candidate.

“We have nothing to fear,” said Jack Lang, a former culture minister and one of her spokesmen. “We are transparent.”

He said a burglary at Royal’s flat last August and the theft of a computer last week from the home of Sophie Bouchet-Petersen, her speechwriter, may have been politically motivated and a Socialist party lawyer demanded an investigation.

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