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Structure your real estate portfolio through an SCI or holding company. Compare corporate vs personal tax, optimize dividends and estate planning.
A real estate holding is a legal structure where one or more properties are owned through companies, primarily SCIs (Societes Civiles Immobilieres - French civil real estate companies). When several SCIs are controlled by a parent company (the holding), this forms a corporate group.
This type of structure is designed for investors who own multiple properties, wish to optimize their taxation, plan the transfer of wealth to their children, or pool cash flow between different real estate operations.
The Real Estate Holding simulator allows you to model these structures, compare tax regimes (personal income tax vs corporate tax) and evaluate the impact on your net yield, dividends and estate transfer costs.
The first step is choosing the legal structure suited to your strategy. The simulator offers four types of setups, each with specific advantages and constraints.
Profits are taxed directly at the shareholder level, according to their personal marginal tax rate. Simple structure, no depreciation allowed, ideal for one or two properties with rental deficit.
Reduced rate of 15% up to EUR 42,500 profit, then 25% above. Building depreciation (25-40 years) is deductible. Profits can be retained without additional taxation.
Parent company owning subsidiary SCIs. Dividends flowing up benefit from the parent-subsidiary regime: 95% exemption (only a 5% expense allocation is taxed). Powerful tool for pooling cash and reinvesting.
Option for personal income tax with commercial activity (furnished rental). Combines LMNP advantages (depreciation) with corporate structure. Reserved for members of the same family.
The choice between personal and corporate tax is structural and difficult to reverse. An SCI that opts for corporate tax cannot switch back to personal income tax. Take time to model both scenarios in the simulator before committing.
In this step, you add the properties held by the structure. For each property, the simulator asks for:
Under corporate tax, the land/building split is crucial: only the building is depreciable. Typically, 15-20% is allocated to land and 80-85% to the building, unless specifically justified (by a property surveyor).
For corporate tax structures, the simulator calculates tax following standard accounting logic:
The central issue with corporate tax is double taxation: profit is first taxed at the company level (corporate tax), then dividends distributed to shareholders are taxed a second time (31.4% PFU since LFSS 2026 or progressive scale with 40% allowance).
For a EUR 50,000 profit: Corporate tax = 42,500 x 15% + 7,500 x 25% = EUR 8,250. Net result: EUR 41,750. If distributed: PFU = 41,750 x 31.4% = EUR 13,110. Net dividend received: EUR 28,640, i.e., an effective total tax rate of 42.7%.
Double taxation (corporate tax + dividends) can push the effective tax rate above 40%. This is why profit retention (not distributing) is often preferred as long as reinvestment opportunities exist.
The simulator integrates the main optimization strategies used in holding company structures:
Keep profits within the company to reinvest without paying flat tax on dividends. Cash accumulates in the company and can fund new acquisitions.
The shareholder lends money to the SCI. Interest paid is deductible from the SCI's profit (within the authorized fiscal rate limit) and taxed at the flat tax rate for the shareholder.
The holding's managing director can receive compensation deductible from the result. Subject to social charges but avoids the corporate tax + dividend double taxation.
Cash pooling between the holding and subsidiaries. One SCI's surplus can fund another's needs, optimizing external financing requirements.
Under corporate tax, building depreciation considerably reduces taxable profit. A EUR 200,000 property (building EUR 170,000) depreciated over 30 years = EUR 5,667 annual deductible charge.
The parent-subsidiary regime is the holding structure's key advantage: dividends flowing from subsidiary SCIs to the holding are only taxed on 5% (expense allocation). This allows cash pooling at minimal tax cost.
One of the most powerful arguments for an SCI is the ease of wealth transfer. The simulator models three main strategies:
The combination of dismemberment + progressive donations + SCI discount allows transferring substantial real estate wealth while considerably minimizing inheritance taxes. This is one of the most effective estate planning strategies.
The simulator generates a comprehensive analysis to help you make an informed decision:
The structure must have genuine economic substance, not solely a tax purpose. Tax authorities can reclassify an artificial arrangement and apply penalties of 40-80%.
Excessive shareholder current accounts relative to share capital can lead to non-deductibility of interest. The debt/equity ratio must remain reasonable (1.5x capital).
Mixing personal expenses with SCI expenses is a management fault that can result in loss of limited liability and tax reassessments.
Fully distributing an SCI's corporate tax profits results in a 40%+ overall tax rate. Prefer retention and reinvestment, or director compensation.
When the SCI sells a property under corporate tax, capital gains are calculated on the net book value (after depreciation), not the purchase price. A property bought for EUR 200,000, depreciated to EUR 100,000, sold for EUR 250,000 generates a EUR 150,000 gain (not EUR 50,000).
Dive deeper into the topic
Test different structural configurations, compare corporate vs personal tax, and evaluate the impact on your net yield and estate planning.