SCI Capital Gains Tax: FAQ

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An SCI (Société Civile Immobilière) is a common French legal structure for acquiring and managing real estate assets. Capital gains can be realized when you sell property or shares held within the structure. How are these gains taxed, and what exemptions are available? Winter Immobilier explains the key aspects of capital gains taxation in an SCI.

How do you calculate capital gains in an SCI?

In an SCI, capital gains correspond to:

• The difference between the value of social shares at acquisition and their sale price
• The difference between the price at which the company purchased a property and its resale price

What amounts are included in the sale price for SCI capital gains calculations?

For capital gains calculation purposes, the sale price of property or social shares by an SCI is the amount stated in the deed of sale or transfer. Certain costs can be deducted from this sale price, which reduces the taxable capital gain:

• Real estate agent commission
• Mortgage discharge fees
• Mandatory technical inspections (energy performance certificate and others)
• Architect fees
• Any compensation paid to a tenant vacating the property
• VAT paid

What amounts are included in the acquisition price for SCI capital gains calculations?

The acquisition price is the amount actually paid by the SCI or by the selling partner to purchase the property or social shares. This amount can be increased by costs and charges to reduce the taxable capital gain. Actual acquisition expenses can be added to the acquisition price with supporting documentation. Alternatively, you can elect a flat-rate increase (7.5%). Renovation costs can be added to the acquisition price too, through two paths that do not share the same conditions. Actual costs are deductible on the strength of contractor invoices, regardless of how long the property has been held. The 15% flat-rate increase, by contrast, is only available if you sell the property more than 5 years after acquiring it, and it can then be applied without having to prove that any work actually took place.

What is the tax regime for capital gains realized by an SCI?

The tax treatment applied to capital gains realized by an SCI depends on the company’s tax status: IR (impôt sur le revenu, income tax) or IS (impôt sur les sociétés, corporate tax).

Capital gains will be subject to IR (income tax) if the SCI operates under the partnership tax regime (the default regime for an SCI). The net capital gain (after any applicable reductions) is taxed at 19%, plus 17.2% in social contributions, for a combined rate of 36.2%. A supplementary tax is added on top of this if the gain exceeds €50,000.

Capital gains will be subject to IS (corporate tax) if the partners have elected to have the SCI taxed as a corporate entity. The standard corporate tax rate is 25%, but it is far from a single flat rate. A reduced rate of 15% applies to the first €42,500 of profit, under two conditions: turnover under €10 million, and share capital fully paid up with at least 75% of it held by individuals. If you manage a family SCI, you probably meet both conditions without realizing it, and it is well worth checking before choosing between the two regimes.

What exemptions are available for an SCI taxed under IR?

Like individuals, an SCI can benefit from exemptions on capital gains tax from real estate sales in the following circumstances:

• The property sold is the primary residence of one of the SCI’s partners (the exemption applies only to that partner’s share of the capital gain)
• It is the first sale of a property that is not a primary residence, and the partner benefiting from the exemption on their share has not owned a primary residence for the past 4 years, and reinvests the price into their primary residence within 24 months. Whether this regime applies to a holding through an SCI is not settled by published tax doctrine, have it validated before relying on it
• The property sale occurs as part of urban or rural land consolidation operations
• The sale benefits a social housing organization or a company committed to leasing social housing
• The sale price of the property is less than €15,000

This last threshold deserves a careful reading. It applies to the sale price, never to the amount of the gain, and it is assessed separately for each co-owner’s share. The same reasoning applies to an individual selling directly, as we explain in our article on capital gains on a second home.

What reductions are available for an SCI taxed under IR?

After 5 years of holding a property, an SCI benefits from reductions on the taxable capital gain amount. This reduction begins at 6% for each year of ownership starting from the 6th year. By the 22nd year, the reduction is 4%. After 22 years of ownership, the capital gain is therefore fully exempt. Capital gains from real estate held in an SCI under the IR regime are also subject to social levies. Reductions linked to the length of ownership apply at 1.65% per year from the 6th to the 21st year, 1.60% in the 22nd year, then 9% per year from the 23rd to the 30th year. Full exemption from social levies is achieved after 30 years of ownership.

The numbers add up exactly, and you can check the calculation yourself. From the 6th to the 21st year, 16 years at 1.65% give 26.4%. The 22nd year adds 1.60%, bringing the total to 28%. The last 8 years at 9% contribute the remaining 72%, and your exemption is complete at 30 years. With a 6% rate, as is often stated elsewhere, the total would cap out at 76% and full exemption would never be reached.

What exemptions are available for an SCI taxed under IS?

The IS regime does not allow an SCI to benefit from reductions or exemptions on taxes applied to real estate capital gains. The capital gain realized by the SCI on a sale is taxed like the company’s ordinary taxable profit.

There is a mechanism that weighs far more heavily than the rate itself, and it is the one you risk discovering too late. Under IS, your SCI depreciates the building each year and deducts that depreciation from its taxable profit. This depreciation reduces the property’s book value. On resale, the capital gain is therefore calculated not on the purchase price, but on this much lower net book value. A building bought for €400,000 and depreciated by €180,000 is only worth €220,000 in your accounts. Resold for €450,000, it generates a capital gain of €230,000, not €50,000. The tax savings you banked during the holding period are effectively paid back on the way out.

The second layer of taxation comes when you want to take the money out. The company has already paid IS on the capital gain, and distributing what remains to the partners creates a dividend, taxed by default under the single flat-rate levy (prélèvement forfaitaire unique). This levy rose from 30% to 31.4% on 1 January 2026, following the CSG increase that brought social contributions to 18.6%. You retain the option to elect for the progressive income tax scale instead, with a 40% allowance on dividends. It is this double layer, IS followed by the flat-rate levy, that you need to weigh against the benefit of depreciation before choosing your tax regime.

What if you sell the shares instead of the property?

Selling your SCI shares rather than the property itself is a common option, particularly within families. When the company is subject to income tax and more than 50% of its assets consist of real estate not used for its own business activity, the sale of your shares falls under the capital gains regime for individuals, under Article 150 UB of the French General Tax Code. You benefit from the same holding-period allowances, which brings the transaction closer to a standard property sale.

One difference is worth anticipating. Sales of shares in real-estate-predominant companies are subject to 5% registration duties, with no allowance whatsoever, whereas an ordinary share sale is taxed at 3% after an allowance. On a transaction worth several hundred thousand euros, the difference is not trivial.

Winter Immobilier advises you on your next investment in Nice

The choice between IR and IS comes down to numbers, and those numbers start with the value of the property. An estimate of your property provides the first figure in the calculation, and our page on selling a property in Nice describes how the process unfolds.

Would you like expert advice on real estate asset planning or want to understand the Nice property market trends? Contact our real estate agency in Nice or call one of our advisors directly.