Why the Family SCI Makes Sense in 2026

In France, more than 1.2 million SCI structures are currently active according to the latest commercial court registry figures. This number continues to grow — and for good reason: the société civile immobilière remains the reference vehicle for any family wishing to hold, manage, and transfer real estate in an organised manner.

In 2026, the context makes the family SCI particularly compelling. Mortgage rates have stabilised around 3.4% over 20 years (versus 4.2% at end-2024), reopening acquisition windows for wealth profiles that had put their projects on hold. The succession planning environment is also tightening: with longer life expectancy, delayed transfers expose families to significant inheritance tax on properties that have appreciated considerably in value, particularly on the French Riviera.

Compared to undivided ownership — the default regime that arises from inheritance — the SCI offers three structural advantages: clear governance (a manager designated in the articles), organised transmission via shares rather than indivisible quotas, and proper accounting separation between personal and family real estate assets.

Corporate Tax or Income Tax: The Decisive Tax Choice

The choice of tax regime for an SCI is one of the most consequential decisions in any wealth strategy, because it is irreversible: an SCI that has opted for corporate tax (IS) cannot revert to income tax (IR) without triggering significant exit taxation (taxation of unrealised gains, dissolution, etc.).

SCI under IR: rental income is included directly in the shareholders’ taxable income in proportion to their shareholding. For a shareholder in the 41% marginal tax bracket, plus social contributions of 17.2%, the effective rate can reach 58.2%. This option suits wealth portfolios in the build-up phase, seeking to optimise taxable results through property deficits (deductible charges, renovation works, borrowing interest deductible up to €10,700 per year against overall income).

SCI under IS: the company is a taxpayer in its own right. The reduced rate of 15% applies up to €42,500 in profits (a threshold maintained by the 2026 Finance Act), then 25% above that. Asset depreciation is deductible from taxable income, significantly reducing the tax base. In return, the gain on disposal is calculated on the net book value (acquisition price less accumulated depreciation), which can generate substantial taxation if the property is later sold.

Transferring Wealth Through Share Dismemberment

One of the family SCI’s greatest strengths lies in the ability to transfer shares by gift, applying the standard legal allowances and the rules of property dismemberment.

In 2026, the gift tax allowance in direct line remains €100,000 per parent per child, renewable every 15 years. Concretely, for a couple with two children, up to €400,000 in assets can be transferred every 15 years entirely free of gift tax (2 parents × 2 children × €100,000).

The technique of share dismemberment combines this mechanism with the separation of usufruct (life interest) and bare ownership: parents donate the bare ownership of shares to their children while retaining the usufruct — i.e. the rental income. The value of bare ownership, calculated according to the fiscal scale in Article 669 of the French General Tax Code, is significantly below full ownership: at age 60, it represents 50% of market value, which allows transmission of an economic value twice as high as the taxable base.

Additionally, a valuation discount on SCI shares is generally accepted by the tax authorities: since shares do not confer a direct right to the underlying assets (unlike direct ownership), a discount of 10 to 20% is typically applied, further enhancing the efficiency of the transfer.

What the 2026 Finance Act Changes for SCIs

The 2026 Finance Act has not fundamentally restructured the SCI framework, but it has introduced several important clarifications that anyone considering an SCI structure must understand.

Reduced IS rate maintained at 15% up to €42,500: the threshold, raised from €38,120 to €42,500 by the 2023 Finance Act, is confirmed without modification. SCIs under IS that generate profits below this threshold benefit from one of the lowest effective rates in the French tax system for rental income.

Reinforced anti-abuse provisions (BEPS / Article 205A of the General Tax Code): the tax authorities are stepping up controls on so-called “shell” IS SCIs — companies created purely to reduce tax liability without real management activity. To protect your SCI, you must ensure the company has genuine economic substance: formally signed leases, documented management fees, general meetings held, and minutes properly archived.

IFI (wealth tax on real estate) and liability deductibility: the 2026 Finance Act clarifies, in line with Council of State case law, the rules on liability deductibility for SCIs subject to IFI. Only the portion of bank debt directly financing the taxable real estate asset is deductible from the value of shares retained for IFI purposes. Shareholder current accounts and operating liabilities are no longer systematically deductible.

Capital gains regime on share disposals: when shares in an IR SCI are sold, the private real estate capital gains regime applies (with allowances based on holding period). However, for an IS SCI, the business capital gains regime applies — with a base calculated on net book value, often well below market price due to accumulated depreciation.

Key Risks for a Secure SCI Structure