The Société Civile Immobilière (SCI) has become a cornerstone of real estate ownership in France. More than one in five foreign property investors now choose to buy through an SCI to simplify management, reduce inheritance costs, and optimize taxation. In France, over 1.5 million SCIs are currently active, illustrating how widespread this structure has become for both families and investors.
However, managing an SCI means understanding its specific tax obligations. The choice between income tax (IR) and corporate tax (IS), the filing of annual returns, and the declaration of property ownership all require precise handling. Mistakes or delays can result in unnecessary tax burdens or penalties.
We provide complete assistance with SCI creation, closure, tax filings, and capital gains management, ensuring full compliance with French tax law and maximum efficiency.
Understanding the SCI in France
A Société Civile Immobilière (SCI) is a French company that allows two or more people to own and manage property together. Instead of holding the property directly, each partner owns shares in the company.
The SCI offers several advantages. It allows flexible management, as decisions can be made by majority vote or through a designated manager, avoiding the deadlocks often seen in joint ownership. It also facilitates inheritance planning, since property can be transferred through company shares, benefiting from French inheritance tax allowances. In addition, it provides asset protection by separating personal and property assets, and offers an accessible, legally recognized structure for non-residents wishing to invest in French real estate.
There are several types of SCI:
- Family SCI for passing on assets
- Rental SCI for managing and renting property
- Construction SCI for building and resale projects
- Attribution SCI for shared ownership with individual use
Compared to joint ownership (indivision), the SCI is more flexible, offering structured management, easier transmission, and long-term stability for property owners.
Watch our video to better understand how an SCI works and how it can simplify property ownership in France:
How Does SCI Taxation Work?
The way an SCI is taxed in France depends on the type of activity it carries out and the tax regime chosen. By default, an SCI is tax-transparent, meaning that profits are not taxed at company level but directly through each partner’s personal income tax. However, in some cases, it can (or must) be taxed under corporate tax (IS) instead of income tax (IR).
When the SCI rents unfurnished property, it stays under the income tax regime (IR). Each partner declares their share of the rental income in their personal tax return, under the “revenus fonciers” category. The income is taxed according to the progressive income tax scale, plus 17.2% in social charges. Certain expenses, such as loan interest, maintenance, or management costs, can be deducted.
If the SCI rents furnished property or carries out a commercial activity, it automatically falls under corporate tax (IS). In this case, profits are taxed at the company level: 15% on profits up to €42,500, and 25% beyond that. The SCI can deduct all operating expenses, including property depreciation, which reduces taxable profits. However, when the property is sold, the capital gain is calculated from the depreciated value, which increases the taxable amount.
In summary:
- Income tax (IR) is generally better for long-term property holding, since capital gains benefit from tax reductions and full exemption after 22 to 30 years. In this case, the individual capital gains tax calculation applies, with progressive abatements over time for both income tax and social charges
- Corporate tax (IS) is typically levied on investment properties that generate taxable profit. This means that owners do not pay personal taxes or social charges on rental income, only corporate tax.
Declaration and Compliance Obligations
Once an SCI is created, it must comply with specific tax and administrative obligations in France. These ensure transparency and proper reporting to the French tax authorities.
The first step is to register the company with the Registre du Commerce et des Sociétés (RCS) and obtain a SIRET number. This identification number is necessary to create a professional account on impots.gouv.fr, the official French tax website. Through this account, the SCI can file its tax returns, communicate with the tax authorities, and access property tax information.
We can take care of this entire process, from registration to the creation of your online tax account, ensuring everything is completed correctly and efficiently.
Each year, the SCI must submit a tax declaration depending on its regime:
- SCIs under income tax (IR) must file form 2072 electronically. Don’t forget that each partner must also submit a personal tax return to report their share of the profit or loss from the SCI.
- SCIs under corporate tax (IS) must file form 2065 with supporting schedules.
Additionally, all property owners in France, including SCIs, must submit an annual property occupancy declaration(déclaration d’occupation). This form confirms how each property is used, whether it is rented, occupied as a main or secondary residence, or vacant. The deadline is usually June 30 each year.
Bookkeeping obligations also vary. Under the income tax regime, formal accounting is not mandatory but strongly recommended to track expenses, partner contributions, and renovation works. Under the corporate tax regime, however, accounting is compulsory, and the SCI must keep full financial statements according to business standards.
Capital Gains and Resale Taxation
When an SCI sells a property, the way the capital gain is taxed depends on whether it is under income tax (IR) or corporate tax (IS). This distinction has major financial implications, especially for long-term investments.
Under the income tax regime (IR), each partner is taxed individually on their share of the gain, just as if they owned the property directly. The capital gain is calculated as the difference between the sale price and the original purchase price, adjusted for eligible costs such as renovation or notary fees. The standard tax rate is 19% income tax plus 17.2% social charges, with reductions that increase over time. After 22 years of ownership, the property becomes fully exempt from income tax, and after 30 years, it is completely exempt from social charges as well.
For tax residents of the EEA, Switzerland, or the United Kingdom, a 7.5% flat tax rate may apply instead of the standard 19% rate on capital gains.
Under the corporate tax regime (IS), the situation is very different. The capital gain is calculated based on the depreciated value of the property recorded in the company’s accounts. Because depreciation lowers the book value over time, this often leads to a higher taxable gain when the property is sold. The gain is taxed at the standard corporate rate of 25%, and any distribution of profits to partners is generally subject to the 30% flat tax (PFU) on dividends.
However, the effective tax rate on dividends may vary depending on the shareholders’ tax residency and any applicable double taxation treaties
In short, while the IS regime may offer annual tax savings through expense and depreciation deductions, it can result in higher taxation upon resale. The IR regime is generally more advantageous for long-term property ownership, thanks to its progressive exemptions on capital gains.
To help evaluate potential outcomes, you can use our Capital Gain Tax Simulator to estimate how much tax would apply to your property sale under each regime.
FAQ: SCI France Tax
1. Do I need to live in France to create an SCI?
No. Both residents and non-residents can create an SCI in France. Non-residents often use it to purchase or manage property in France while benefiting from structured ownership and easier inheritance planning.
2. What is the minimum capital required to create an SCI?
There is no legal minimum capital. You can start an SCI with as little as €1, though a more realistic contribution (often between €1,000 and €5,000) is recommended to ensure credibility with banks and tax authorities.
3. Which tax regime should I choose, Income Tax (IR) or Corporate Tax (IS)?
It depends on your objectives. The IR regime is usually better for long-term ownership because of capital gains exemptions after 22–30 years. The IS regime can be more efficient for short- or medium-term investments, as it allows property depreciation and more deductible expenses.
4. What are the main tax forms for an SCI?
- Form 2072: for SCIs under the income tax regime (IR).
- Form 2065: for SCIs under the corporate tax regime (IS).
Both must be filed electronically via the SCI’s professional account on impots.gouv.fr or through an accountant.
5. Is accounting mandatory for an SCI?
Not always. For SCIs under income tax, accounting is optional but strongly recommended. For SCIs under corporate tax, full accounting is mandatory, including balance sheets and income statements.