The Real Estate Civil Company (SCI) is a structure favored by those who wish to invest in real estate while optimizing their management and inheritance of assets. Before getting started, it is essential to understand how a SCI works and the advantages it offers compared to a personal investment. Let’s discover why and how to invest in SCI can be a winning strategy, especially for rental investment and asset management.
Investing in a real estate company (SCI) or in your own name: What choice for real estate investment?
Many wonder whether it is wiser to invest in a real estate company (SCI) or in one's own name for a real estate project. Each of these options has advantages depending on the type of investment considered and the fiscal objectives.
Investing in a real estate company (SCI) : The SCI allows pooling resources among several partners, thus facilitating the acquisition of properties. It also offers better long-term asset management by simplifying the transfer of shares to heirs.
Investing in one's own name : This method of investment is suitable for individual projects of small scale. However, it involves direct personal taxation on rental income, without the specific advantages of the SCI regarding succession.
Investing in a Real Estate Investment Company (REIC) is particularly interesting for those aiming for family projects, collective management of assets, or heritage transfer.
Real estate rental investment: Which tax regime to choose?
For a rental investment in a real estate company (SCI), the choice of tax regime (income tax or corporate tax) is crucial. The SCI can be subject to:
To the Income Tax (IR) : This regime is often recommended for investors seeking simplified management and to benefit from the personal capital gains regime. It is perfectly suited for unfurnished rental.
To the Corporate Tax (IS) : This regime allows for the depreciation of the property, which reduces the taxable profit of the SCI. However, it leads to different taxation upon resale, subject to the regime of professional capital gains, which is less advantageous in the long run.
What are the Advantages of Real Estate Investment in a SCI Subject to Income Tax?
For a real estate investment SCI, the income tax regime presents several advantages:
Real estate deficit : Deficits can be deducted from the taxable income of the household, up to €10,700 per year.
Capital gains tax regime for individuals : When selling property held by a SCI subject to income tax, you benefit from a progressive allowance on capital gains, with a total exemption after 22 years for income tax and 30 years for social contributions.
SCI and heritage: a tool for transmission
The SCI patrimoine is an excellent tool for those who wish to build family wealth and pass it on to their heirs in an optimized way. Indeed, a SCI allows for dividing assets into shares, facilitating the gradual transfer to beneficiaries.
Why Choose a SCI for Wealth Transfer?
The SCI transmission offers several benefits for protecting and transferring real estate:
Facilitated transmission : In the case of a donation or inheritance, the shares of the SCI can be transmitted gradually, thereby limiting inheritance tax.
Tax optimization : Donations of shares benefit from tax allowances, and the value of the shares can be reduced by the application of a discount for collective management.
Family control : The SCI allows for maintaining control over the assets even after the transfer of shares, thanks to statutes that can restrict the transfer of shares to third parties.
SCI under IR or IS: Which regime for a rental investment in SCI?
The choice between the corporate tax regime (IS) and the personal income tax regime (IR) for a real estate investment company (SCI) depends on long-term profitability and management objectives:
SCI under IR : Ideal for properties rented unfurnished, it allows for the capital gains regime for individuals. Expenses and renovations are deductible, and real estate losses can be set off against the partners' property income.
SCI under IS : This regime is better suited for furnished rental projects or properties generating high income. It allows for the depreciation of the property, which reduces taxable income. However, capital gains are taxed more heavily and without any reduction for the holding period.
Why choose a real estate investment company (SCI)?
The real estate investment company (SCI) allows for the structuring of real estate projects collectively and simplifies the transfer to heirs. It is a suitable solution for those who wish to invest as a family or among partners while maintaining the flexibility of managing a real estate portfolio. However, the tax regime must be carefully chosen to optimize profitability and minimize taxation in the long term.
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