More than 20% of foreign buyers in France choose to purchase property through an SCI (Société Civile Immobilière), a structure that simplifies ownership, inheritance, and tax management. With over 1.5 million SCIs currently active, this model has become a preferred option for investors and families seeking long-term flexibility and protection.
Whether you’re planning to buy a holiday home or invest in rental property, setting up an SCI can help you optimize your taxes and secure your assets.
We can assist you with every step, from SCI creation to tax filings and capital gains management.
How an SCI Works
An SCI (Société Civile Immobilière) is a French company created to own and manage real estate. Instead of holding the property directly, each partner owns shares in the company, which in turn owns the property. This makes ownership more flexible and structured, ideal for joint purchases between family members, partners, or investors.
Decisions within the SCI are made collectively, either by a designated manager (gérant) or by majority vote, which helps avoid the deadlocks often seen in joint ownership. It also allows for smoother inheritance planning, since transferring shares is much simpler and more tax-efficient than transferring property itself.
For non-residents, the SCI offers additional benefits, such as asset protection, simplified succession, and the possibility to optimize French taxation while maintaining clear legal ownership of their property.
Watch our video to better understand how an SCI works and how it can simplify property ownership in France:
French SCI Taxation Basics
When buying property in France through an SCI, the purchase taxes are the same as for direct ownership, around 7.5% of the property price (slightly less in some regions). The difference lies in how the SCI’s income and profits are taxed.
By default, an SCI falls under the Income Tax (IR) regime. This means the company itself doesn’t pay tax, instead, each partner declares their share of income on their personal tax return. This structure is ideal for long-term property ownership, as capital gains can eventually be fully exempt after 22 to 30 years.
However, an SCI can also choose, or be required, to pay Corporate Tax (IS), particularly if it rents out furnished property or carries out commercial activities. Under IS, the company is taxed at 25%, but it can deduct expenses and depreciation, which reduces annual taxable profits. The trade-off is that capital gains are higher at resale, since depreciation lowers the property’s book value over time.
Choosing the right tax regime depends on your goals, long-term asset growth or short-term rental income, and we can help you make that decision to maximize your tax efficiency.
Annual Declarations and Obligations in French SCI
Once the SCI is registered, it must comply with several annual tax and reporting requirements in France. These obligations ensure transparency with the French tax authorities and help maintain the SCI’s legal standing.
Each year, the company must file a tax return according to its tax regime:
- Form 2072 for SCIs under the Income Tax (IR) regime.
- Form 2065 for SCIs under the Corporate Tax (IS) regime.
Both forms must be submitted electronically through the SCI’s professional account on impots.gouv.fr.
Additionally, all property owners in France, including SCIs, must complete a property occupancy declaration(déclaration d’occupation) by June 30 each year. This confirms how each property is used: rented, occupied as a main or secondary residence, or vacant.
Accounting rules also vary: for IR SCIs, bookkeeping is not legally required but strongly recommended to track partner contributions and expenses. For IS SCIs, full accounting is mandatory, including balance sheets and profit statements.
Capital Gains and Wealth Tax
When an SCI sells a property, the taxation of the capital gain depends on whether it is under Income Tax (IR) or Corporate Tax (IS), a crucial distinction for investors planning a long-term or short-term strategy.
Under the IR regime, each partner is taxed individually on their share of the gain, as if they owned the property directly. The gain is calculated as the difference between the sale price and the purchase price, adjusted for eligible expenses such as notary fees or renovation work. The tax rate is 19% for income tax plus 17.2% in social charges. Over time, these taxes are reduced, leading to full exemption from income tax after 22 years and from social charges after 30 years.
Under the IS regime, the capital gain is based on the depreciated book value of the property, not its original cost. Because depreciation lowers this value, the taxable gain is often higher when selling. The profit is taxed at the standard corporate rate of 25%, and any distributed dividends are subject to a 30% flat tax (PFU).
In addition, partners may be subject to the French Real Estate Wealth Tax (IFI) if the net value of their property in France exceeds €1.3 million, even if they live abroad.
To help you evaluate your potential tax exposure, you can use our Capital Gain Tax Simulator to compare outcomes under both regimes and plan your strategy effectively.