Does an SCI mean paying less tax?

Not automatically. Under IR, the tax treatment is identical to direct ownership. Under IS, depreciation reduces tax during the holding period but increases the capital gain on resale. The main benefit remains joint ownership and passing on assets.

Can you let furnished through an SCI?

Yes, but regular furnished letting is a commercial activity: an SCI under IR automatically switches to IS, irreversibly. For furnished lettings, direct ownership (LMNP) is often preferable.

Do you need more than one person to set up an SCI?

Yes: an SCI requires at least two partners. A sole landlord cannot form one, unless they bring in a relative, even with a very small stake.

IR or IS: can you change your mind?

The election for IS is in principle irrevocable. The choice must therefore be settled from the outset, taking into account the intended holding period and any future resale.

Renting through an SCI: how it works, IR or IS taxation, benefits

Updated on July 16, 2026 · 7 min read

The société civile immobilière (SCI, a French non-trading property company) lets several people hold and rent out a property together, and prepares the transfer of assets to heirs. It brings no automatic tax advantage: everything depends on the tax regime chosen (IR or IS) and on the type of letting. Badly calibrated — especially for furnished rentals — it can cost more than it earns.

What an SCI is and what it is for

An SCI is a non-trading company held by at least two partners, which contributes or buys properties and rents them out. The partners hold shares in the company, not the walls themselves. Its main uses are joint ownership (a couple, a family, business partners), organising management through an appointed manager, and preparing succession by gifting shares gradually.

IR or IS: the real trade-off

The tax regime determines everything else:

SCI under IR (impôt sur le revenu, personal income tax — the default, so-called transparent regime): each partner declares their share as revenus fonciers (property income), just as with direct ownership. Déficit foncier (property loss offset) can be applied, under either the régime réel (actual expenses) or micro-foncier (flat-rate allowance).
SCI under IS (impôt sur les sociétés, corporate income tax — by election, irrevocable): the company is taxed on its profit, with depreciation of the property — the taxable base falls sharply during the holding period, but the capital gain on resale is calculated on the depreciated value, and is therefore heavier.

The furnished-rental trap

Letting furnished is a commercial activity. An SCI under IR that carries out furnished letting on a regular basis automatically switches to IS — with lasting and irreversible tax consequences. If the project involves furnished letting, it must be anticipated: either accept the IS regime, or hold the property directly (LMNP, loueur en meublé non professionnel — non-professional furnished landlord status), or keep the furnished activity strictly contained.

Passing on assets and split ownership

This is the SCI’s main strength. Gifting shares in instalments makes it possible to use gift tax allowances, which are restored periodically, and to pass on assets without creating joint undivided ownership. Démembrement (splitting ownership) — bare ownership to the children, usufruct retained — leaves the rental income with the donor while reducing the taxable base over time.

The cost of the paperwork

An SCI requires articles of association, registration, an annual general meeting and accounts (mandatory and full under IS). Expect set-up fees and then a recurring annual cost, often including an accountant under IS. For a single landlord with one or two properties, direct ownership generally remains simpler and cheaper.

Frequently asked questions

Does an SCI mean paying less tax?: Not automatically. Under IR, the tax treatment is identical to direct ownership. Under IS, depreciation reduces tax during the holding period but increases the capital gain on resale. The main benefit remains joint ownership and passing on assets.
Can you let furnished through an SCI?: Yes, but regular furnished letting is a commercial activity: an SCI under IR automatically switches to IS, irreversibly. For furnished lettings, direct ownership (LMNP) is often preferable.
Do you need more than one person to set up an SCI?: Yes: an SCI requires at least two partners. A sole landlord cannot form one, unless they bring in a relative, even with a very small stake.
IR or IS: can you change your mind?: The election for IS is in principle irrevocable. The choice must therefore be settled from the outset, taking into account the intended holding period and any future resale.