We remind you that the property investment partnership company, "SCI", the most used legal corporation (used 98%), is not appropriate in the case of a rented property. Indeed, furnished hiring is a commercial act and thus incompatible by nature with the SCI. Consequently the French tax authorities penalize SCIs, subjecting them to company tax as well as to capital gain tax at the time of the resale, even after 15 years.
However, the SCI is beneficial, in the event that the property is not rented, as that it is possible to transmit it to children (in the case of the parents donation of the underlying freehold interest of the social shares of this company to the children). Furthermore, if the property is the principal residence of the associates, it will be exonerated of capital gains tax, even if it is inhabited in a European Economic Community country.
Additionally, we will also avoid the usage of offshore companies, whose legal assemblies and disassemblies are costly, and whose operations are dependent on third parties.
Offshore companies present a major disadvantage as that they are required to pay a tax of 3% of the price of the property each year to the French tax authorities. Moreover, they are frequent targets of the French tax authorities.
We propose you simple legal assemblies and we ensure their accounting follow up and tax declarations.
Thus, according to the nationality and the place of residence of the non-resident, we can offer transparent tax solutions which have the advantage of presenting the same solutions as the "SCI" in terms of the transmission to children, as well as the same safety regarding “third” parties.
Furthermore, if the property is rented, the non-resident will avoid the tax penalty from the corporation tax and will be exonerated of the capital gains tax after five years instead of fifteen years.
The non-resident will not be required to pay the property tax along with the land tax that varies depending on the departments. Furthermore, these legal structures will enable non-residents to recuperate the VAT, as well as avoid the income tax that is based on three times the rental value of their property (See International Conventions as regards taxation ratified between France and the country on which depends the non resident).