What is an SCI?

The société civile immobilière is a civil (non-trading) company whose purpose is to hold property. It requires at least two members, who make contributions and in return receive shares in proportion to those contributions; it is run by one or more managers (gérants). The capital is freely set.

Towards third parties, the members are liable for the company’s debts on an unlimited but non-joint basis, in proportion to their shareholding (art. 1857 of the Civil Code): a creditor may claim only each member’s share, and only after pursuing the company without success (art. 1858).

Taxation of income: “tax transparency”

By default an SCI is not subject to corporate tax: it falls under the partnership regime (art. 8 CGI). Income (rental income where the property is let unfurnished) is taxed directly in the hands of the members, in proportion to their shares, whether distributed or not. For a non-resident member, this French-source income is taxable in France, subject to tax treaties.

The SCI may elect for corporate tax (art. 239 CGI). This allows the building to be depreciated, but on a later sale the gain becomes a business capital gain (depreciation is added back), generally less favourable than the individuals’ regime. The election may be revoked up to the 5th financial year, after which it becomes irrevocable; once given up, it can never be taken again. The income-tax / corporate-tax choice must therefore be weighed carefully.

Capital gain on resale

When the SCI sells the property, the gain falls under the art. 244 bis A withholding: for a non-resident individual member, 19 % pro rata to their shares, plus social levies, with holding-period allowances; the corporate-tax rate applies to a corporate member. See the full guide to non-residents’ capital gains.

The annual 3 % tax

Any entity holding property in France may be liable to an annual tax of 3 % of its market value (arts. 990 D to 990 G CGI). It is aimed at opaque structures that conceal their owners: an SCI that opts for transparency by declaring the identity of its members each year (form 2746, before 15 May) is exempt. This annual formality is part of the ongoing support we provide.

Passing it on: what an SCI can and cannot do

SCI shares are movable property (art. 529 of the Civil Code), whereas a directly-held building is immovable property. This distinction once affected which succession law applied. That is no longer so: since the European “Brussels IV” Regulation (deaths on or after 17 August 2015), the whole estate follows a single law. See the Franco-British inheritance page.

The real value of an SCI lies elsewhere: organising and passing on. It allows shares to be gifted gradually — typically by splitting ownership (gift of the bare ownership of the shares while retaining a life interest) — using the €100,000 allowance per parent and per child, renewable every 15 years (arts. 779 and 784 CGI). It avoids joint ownership (indivision), organises governance (the manager) and helps keep the property in the family.

It should not be mistaken for aggressive tax planning: an SCI erases neither forced heirship nor inheritance tax. The shares remain taxable, and a property located in France remains subject to French transfer duties (art. 750 ter CGI) whatever the deceased’s residence.

And on the British side?

The treatment of an SCI by the UK, Jersey or Guernsey tax authorities may differ from the French treatment (transparent or opaque characterisation, consequences of occupying the property…) and may have effects specific to your jurisdiction. This is a matter for local tax advice: before setting up an SCI, we suggest you confirm it with your adviser in the Islands or the UK, with whom we are glad to coordinate.

In brief

Sources: Civil Code art. 1857, 1858, 529; CGI arts. 8, 239, 244 bis A, 779, 784, 990 D to 990 G, 750 ter; impots.gouv.fr; notaires.fr. General information current as at August 2026, not exhaustive and not personalised advice.