Capital gains when an SCI sells the property

Capital gains when an SCI sells the property

When an income-tax SCI (société civile immobilière) sells its property, the gain is taxed - but on the members, under the regime of private real-estate capital gains (plus-values immobilières des particuliers), the same regime that would apply if each member had owned their share of the property directly. That is one of the quiet strengths of holding French property through an income-tax SCI: the sale is taxed exactly as a private sale would be, with the generous holding-period allowance that removes the tax entirely over time. The SCI computes the gain, the tax is paid at the notary on the members' behalf, and the individual members are taxed at 19% plus 17.2% social levies on their share, reduced by an allowance for the length of ownership that reaches full exemption. This guide sets out who is taxed and when, how the gain is computed, the holding-period taper, the rates and surtaxe, the exemptions - including the family home - and the traps around dissolution and corporate tax.

The subject matters because the sale is where an SCI's whole tax structure is vindicated or undone. An income-tax SCI held for the long term can sell with little or no capital-gains tax, thanks to the taper; a corporate-tax SCI cannot, as our pillars on the IS option and furnished letting explain. And the mechanics - who is taxed, at what date, on what computed gain, with which exemptions - decide the real bill. For an international family selling French property held through an SCI, and often taxed across borders, understanding exactly how the sale gain is taxed is what turns a disposal into a planned, predictable event rather than a surprise at the notary.

Who is taxed, and when

The gain on an income-tax SCI's sale is taxed on its individual members. Where a civil company not subject to corporate tax comprises individual members, the real-estate capital gains it realises on the sale of the social buildings are taxable in the name of the members present at the date of the sale, under the regime of private real-estate capital gains. Two features of that rule matter. First, the taxable persons are the members present at the date of the sale - not, as for the ordinary annual result, the members at the close of the exercise - so a member who sells their shares before the property is sold escapes the gain, and one who is a member on the sale date bears it. Second, the regime is the private-gains regime, the same one that applies to an individual selling a property directly, which is what gives the SCI's sale its favourable treatment. Members who are themselves companies subject to corporate tax, or taxed in another category, continue to be taxed in the ordinary way at the close of the exercise, on their own regime's rules.

The tax is collected at the point of sale, but the charge belongs to the members. The tax on the gain is paid by the company at the property-registry service when the sale is registered, on the members' behalf, and that payment is libératoire - it discharges the income tax on the gain owed by the individual members present at the sale in the private-gains category, so they have nothing further to pay on it. Even so, the charge of the tax falls, in substance, on the members: the company pays it out of the sale proceeds, reducing what the members ultimately receive. The share of the gain attributed to each member follows the profit-sharing key in the articles as at the close of the exercise preceding the sale, absent a later agreement changing it. So the sale is taxed once, at the notary, on the members present that day, in the proportions the articles set - a clean, self-contained event, provided the membership and the sharing key are clear.

How the gain is computed

The gross gain is a simple subtraction, refined by lump-sum uplifts. It is the difference between the sale price - the real price stipulated in the deed, whatever the payment terms, reduced by the VAT paid and the costs of sale - and the acquisition price effectively paid by the seller, as stipulated in the deed, or, for a property acquired by gift or inheritance, the value retained for the transfer-duty assessment (CGI Arts. 150 V, 150 VB). The acquisition price is not left bare: it is increased to reflect the costs of acquiring and improving the property, and the law allows lump sums so that a seller need not always produce every invoice. In practice the acquisition price is augmented by:

• a lump sum of 7.5% for the acquisition costs (notary's fees and duties), or the real amount if higher and evidenced;
• a lump sum of 15% for works, available without proof where the property has been held for more than five years, or the real cost of the works if evidenced.

These uplifts reduce the taxable gain, sometimes substantially - the 15% works lump sum in particular is available after five years whether or not works were actually done, so a long-held property carries a built-in reduction. One asymmetry is worth knowing: except on a block sale of a property acquired in successive fractions, a gross loss on a disposal is not taken into account (CGI Art. 150 VD), so a loss on one property cannot generally be set against a gain on another. The gross gain, once computed with the uplifted acquisition price, is then reduced by the holding-period allowance examined next - and it is that allowance, more than the computation of the gross gain, that usually determines whether any tax is due at all.

How is your SCI's sale gain taxed?

The treatment depends on the hold and the members. Pick your situation - the check explains how the gain is taxed.

The holding-period taper: 22 years for tax, 30 for levies

The allowance for the length of ownership is the heart of the private-gains regime, and it works on two separate timetables - one for the income tax, a longer one for the social levies. For the income tax, the allowance is 6% for each year of ownership from the sixth to the twenty-first, and 4% for the twenty-second year, which brings the income tax to a total exemption after twenty-two years of ownership (CGI Art. 150 VC). For the social levies, the allowance is slower: 1.65% for each year from the sixth to the twenty-first, 1.60% for the twenty-second year, and 9% for each year from the twenty-third to the thirtieth, reaching a total exemption from the social levies after thirty years. So the two taxes fall away at different speeds:

• Income tax (19%): no allowance for the first five years, then 6% a year to year 21 and 4% at year 22 - fully exempt after 22 years;
• Social levies (17.2%): no allowance for the first five years, then 1.65% a year to year 21, 1.60% at year 22, and 9% a year to year 30 - fully exempt after 30 years.

The practical shape of this is that a property held a long time is sold increasingly lightly, and after thirty years entirely free of capital-gains tax. Between twenty-two and thirty years, the income tax is already gone but the social levies still bite, tapering to nothing at year thirty. One further point of sequencing matters: the €50,000 threshold for the surtaxe examined below is assessed after the income-tax-specific allowance has been applied, so the taper reduces not only the tax but the base on which the surtaxe is measured. For a family deciding when to sell an income-tax SCI's property, these timetables are the single most important planning input - holding a few more years across a taper threshold can materially change the tax, and in the long run eliminate it.

The rates, the surtaxe, and who pays at the notary

The tax on the net gain, after the allowance, is levied at defined rates and collected at the sale. In support of the capital-gains declaration (form 2048-IMM for buildings, or 2048-TAB for building land), signed by the gérant who sells on the company's behalf, the partnership pays to the property-registry service, at the point of registration:

• the income tax of 19% on the gain, pro-rated to the shares of the members present at the sale who are taxed in the private-gains category;
• the additional social levies of 17.2%, pro-rated to those same members' shares;
• where applicable, the surtaxe on the fraction of the taxable gain exceeding €50,000 (CGI Art. 1609 nonies G), which runs progressively from 2% to 6% according to the size of the gain.

Two refinements are worth noting. The €50,000 surtaxe threshold is assessed after the income-tax allowance, so a well-tapered gain may fall below it even where the raw gain was larger. And the social levies are not uniform for everyone: sellers who are not affiliated to the compulsory French social-security system but who belong to the social-security scheme of another EU or EEA member state benefit from a reduced levy rather than the full 17.2% - a point of real importance for the international families who often hold French property through an SCI. The declaration must name each member and the nature of the tax applicable to each share, including for members not taxed under the private-gains regime, so the notary can account for the mixed treatment where the membership is mixed. The tax the company pays discharges the individual members' income tax on the gain, but the economic charge, as noted, is theirs - it comes out of the proceeds before they are distributed.

Which exemption might apply to your sale?

Several exemptions can remove the gain. Pick what fits - the check explains whether it is likely to apply.

The main-home exemption through an SCI

The most valuable exemption in the private-gains regime - the exemption for the seller's principal residence - can reach a member of an income-tax SCI. The exemptions provided for private real-estate gains realised directly by an individual are, in principle, applicable to the gains realised indirectly by that individual as a member of a company under the partnership regime, where the company itself is under that regime. So where the SCI's property is occupied by a member as their principal residence, the main-home exemption applies to that member's quote-part of the gain - the member is treated, for their share, as if they had sold their own home. This is a significant point for families who hold their home through an SCI: the structure does not, by itself, forfeit the main-home exemption, which flows through to the occupying member's share.

The flow-through is broad but not total, and one limit is specific. While the main-home exemption and the general private-gain exemptions pass through to the member's share, the exemption reserved for holders of an old-age pension or of a disability "inclusion-mobility" card, subject to means conditions, applies only to gains realised directly by individuals - not to those realised indirectly through a company. So a member who would qualify for that particular exemption on a direct sale does not obtain it on the SCI's sale of the property. The general lesson is that holding property through an income-tax SCI preserves the ordinary private-gains exemptions for the members - the main-home exemption above all - but a handful of person-specific reliefs are confined to direct ownership. A family relying on an exemption should confirm which category it falls into before assuming it survives the SCI.

Dissolution, contributions, and the corporate-tax trap

Three situations at the edges of a "sale" deserve attention, because each is taxed as a gain even though none is an ordinary sale to a buyer. First, the range of taxable events is wider than a sale: only onerous transfers are taxable, but these include sales, contributions of the property to a company, exchanges with or without balancing payment, and expropriations (CGI Art. 150 U). So contributing the SCI's building into another company, or exchanging it, triggers the gain just as a sale would. Second, dissolution: on a dissolution the company's legal personality subsists for the needs of the liquidation until the publication of its closure (C. civ. Art. 1844-8), and it is at that point that ownership of the social assets passes to the members; if, during the liquidation, an asset is sold to a third party or attributed to a member, the gain is considered realised by the company itself and taxed accordingly. Winding up an SCI, in other words, is a taxable moment for any latent gain in its property.

Third, and most important, the corporate-tax trap. The favourable private-gains regime - with its taper to exemption - is available only to an income-tax SCI. An SCI that carries on habitual operations of buying and reselling property is treated as a property dealer (marchand de biens) and is subject to corporate tax by law, losing the private-gains regime entirely. And opting for corporate tax, or being pushed into it, in principle triggers the taxation of the latent gains at the change of regime and then subjects any future sale to the professional-gain rules - no taper, depreciation recaptured - as our pillars on the IS option and furnished letting set out. So the generous treatment described in this guide is a feature of the income-tax SCI specifically, and it is forfeited the moment the company crosses into the corporate regime, whether by choice, by dealing activity, or by furnished letting. Preserving the private-gains treatment is, in large part, a matter of keeping the SCI on the right side of that line until it sells.

An SCI's property-sale gain - at a glance

Frequently Asked Questions

This article is for general information only and states French law and tax rates in force as published in the sources available at the date shown above, including the private real-estate capital-gains rates, allowances and surtaxe applicable for 2026. It does not constitute legal or tax advice. The tax on a given sale depends on the members, the hold and the property. Always seek qualified legal and tax advice before selling an SCI's property.