Société Civile Immobilière: Buy French Property Through an SCI

Getting a French Mortgage through an Société Civile Immobilière

Considering a property purchase in France? Explore the advantages of buying through a French company using an Société Civile Immobilière (SCI) mortgage with Worldwide Property Co.

How does an SCI work in France?

A Société Civile Immobilière, or simply known as an SCI, is a common vehicle for property ownership in France. It’s a legal entity formed to manage and hold real estate assets, offering flexibility and liability protection.

The Different Types of SCIs

There are various types of SCIs based on their activities, including:

• SCI de location-gestion: Constituted with the aim of acquiring and renting real estate.
• SCI familiale: A family real estate investment company set up to manage a family real estate asset and prepare succession.
• SCI de construction –vente: Constituted with the aim of building one or more buildings for sale.
• SCI d’attribution: Constituted with the purpose of acquiring or constructing buildings to distribute them among the partners in proportion to their shares.

How is an SCI taxed in France?

An SCI in France may face taxation under two main regimes: income tax, where shareholders are taxed directly on their share, or corporate tax, treating it as a commercial company. Opting for income tax is advisable for property purchases, but if the SCI rents the property furnished, it’s automatically subject to corporate income tax, which can impact resale.

Advantages of an SCI in France

Opting for a SCI when purchasing property in France offers several advantages:

• Flexible Ownership Structure: A SCI allows for a flexible ownership structure, facilitating stakeholders to freely transfer their shares between themselves and others.
• Liability Protection: Shareholders in a SCI benefit from liability protection, shielding them from personal responsibility for the company’s debts.

Disadvantages of a SCI in France

Despite its benefits, there are some drawbacks to consider when opting for a SCI:

1. Complexity: Establishing and maintaining a SCI can be administratively complex and may require legal and financial expertise.
2. Potential Tax Implications: While a SCI offers tax advantages, it is subject to certain taxes and regulations, which may vary depending on the company’s activities and the shareholders’ residency status.
3. Rigid Ownership: In some cases, the flexible ownership structure of a SCI may lead to conflicts or challenges in decision-making, especially if there are multiple shareholders with diverging interests.

Differences Between SCI and SARL de Famille

The difference between SARL de Famille and a SCI lies in membership structure and permitted activities. SARL de Famille is typically for family members and offers a wider range of economic activities, including furnished rentals, while a SCI is open to any stakeholders.

SARL de Famille is subject to income tax, while a SCI is subject to corporation tax. This distinction is essential, especially for those considering furnished rentals, as SARL de Famille allows this type of rental, unlike SCIs.

Disclaimer: This guide is for information purposes only. While an SCI mortgage presents numerous benefits, it’s crucial to seek independent tax advice to ensure the chosen structure aligns with your financial objectives.

Explore Your Options with Worldwide Property Co

Ready to explore your options for buying property in France through a French company? With our international mortgage brokerage services and expertise in non-resident property purchases, we’ll guide you through every step of the process and help you make informed decisions.

Contact us today for personalised assistance from our network of legal professionals and mortgage advisers.