Putting Your French Main Home in an SCI: The Risks to Know

Putting your French main home in an SCI: the risks to know

Holding a French main home through an SCI (société civile immobilière) is common advice, and for some families it is the right structure. But the family home is treated differently from any other property, because the law attaches protections to it that exist precisely because it is where the household lives. Put the home into a company and those protections do not travel with it: the spousal double-consent rule can be bypassed, the surviving spouse's housing rights fall away, and two significant tax abatements are lost. None of this is obvious at the moment of purchase, which is why so many buyers discover it only when they try to sell, or when one spouse dies.

This guide sets out each protection the family home loses inside an SCI, the case law that established it, the ways some of them can be rebuilt by careful drafting, and the situations where a home in an SCI still makes sense despite the losses. It is the detailed companion to the family-home warning in our full buyer's guide.

Why the family home is treated differently from other property

French law surrounds the home where a family lives with a set of protections it gives no other asset. A spouse cannot dispose of it alone; a surviving spouse has rights to keep living in it; the tax system grants abatements on it for wealth tax and inheritance tax; and an entrepreneur's main residence is shielded from business creditors. These rules are attached to the home as a home - to the fact that the household lives there and that its members would be harmed by losing it.

An SCI interrupts that link. Once the company owns the building, the occupants are no longer its owners; they are shareholders of a company that owns it, and they occupy it as a matter of internal arrangement rather than as proprietors. The company forms a screen between the family and the home. For most of the protections above, the law looks through to who owns the property - and finds the company, not the household. That is the source of every risk in this guide: the protections are written for owners of a home, and an SCI turns the occupants into something else.

The spousal double-consent rule when the home is in an SCI

Whatever their matrimonial regime, spouses are forbidden from disposing alone of the rights that secure the family home: both must consent (C. civ. Art. 215, al. 3). This is a protective rule of public order - it stops one spouse selling the roof over the family's head without the other's agreement. Holding the home through an SCI is capable of defeating it, because the company, not the spouses, holds the property, and the company acts through its manager and its shareholders' meeting.

The Cour de cassation has drawn the boundary precisely. Where the main residence is held through an SCI in which at least one spouse is a shareholder, the double-consent requirement applies to a sale only if the shareholder-spouse had been authorised to occupy the property by virtue of a shareholder right or by a decision taken unanimously by the shareholders (Cass. 1re civ. 14 March 2018, n° 17-16482). In that case, the majority shareholder and manager of the SCI that owned the couple's home had been authorised by the shareholders' meeting to sell the flat without his wife's consent; the wife sought to annul the sale for breach of Article 215, and the Court held that she could not claim the protection, because there was no lease, no right of habitation, and no occupancy agreement from the SCI in favour of its shareholders to establish that the flat was the protected family home in the relevant sense.

The lesson is that occupation has to be formalised. Where the couple documents their occupation of the SCI's property as the family home - through the articles, minutes of a shareholders' meeting, a residential lease, a right of habitation, or an occupancy agreement - the double-consent protection can operate. Where they do not, the non-consenting spouse cannot annul a sale decided by the company. A home placed in an SCI without that paperwork has lost one of the strongest protections French law gives it, and the loss surfaces only when one spouse tries to sell over the other's objection.

Is your home actually protected inside the SCI?

Pick the description that matches your setup - the check shows whether the family-home protections still operate.

The surviving spouse's housing rights and the SCI

French law gives a surviving spouse rights to remain in the family home: a one-year right in the immediate aftermath of the death, and a lifetime right of habitation, under Articles 763 and 764 of the Civil Code. But these rights apply only where the home forms part, wholly or partly, of the estate. Where the main residence has been acquired through an SCI, the home belongs to the company and not to the spouses, so it does not fall into the succession - and the surviving spouse's lifetime and one-year rights of habitation cannot be exercised.

There is a route back to a measure of protection, and it runs through the same documentation that supports the double-consent rule. Where the spouses have concluded a lease or an occupancy agreement with the SCI, the surviving spouse can claim the temporary housing right: reimbursement of a year's rent following the death, and then continuation of the lease or occupancy agreement until it is terminated (C. civ. Art. 763). It is a narrower protection than the statutory right over a home held in person, and it depends entirely on the arrangement having been put in place in advance. A couple who put their home into an SCI and sign nothing leave the survivor with neither the statutory right nor its contractual substitute.

The tax abatements you lose on a home held in an SCI

Two tax reliefs on the main residence are lost when the home is held through an SCI, and both matter to the numbers a family actually pays.

The 30 % wealth-tax abatement. For the property wealth tax (impôt sur la fortune immobilière, IFI), a 30 % abatement is applied to the market value of the property that is the taxpayer's main residence, taken free of occupation (CGI Art. 973, I). That abatement does not apply where the property is held indirectly through an SCI - the Constitutional Council confirmed the point (decision n° 2019-820 QPC, 17 January 2020). There is a partial counterweight: the SCI shares the taxpayer holds may themselves carry a discount, which can reach a comparable percentage, on account of constraints that reduce their market value - undivided ownership, the shareholder's matrimonial regime, the terms of the articles - or because the property is made available to a shareholder or a third party under a residential, professional or commercial lease. The automatic 30 % is gone, but a reasoned valuation discount on the shares may recover part of the ground.

The 20 % inheritance-tax abatement. For inheritance tax, a 20 % abatement can be applied to the market value of the property that was the deceased's main residence at death, where at the same date it is also occupied as a main residence by the surviving spouse, the PACS partner, or one or more minor or protected-adult children of the deceased, their spouse or their partner (CGI Art. 764 bis). This abatement, too, does not apply where the property is held indirectly through an SCI. A family holding the home in an SCI therefore loses a relief worth a fifth of the home's value against the inheritance-tax base.

It is not all loss on the tax side, and accuracy requires saying so. For the taxation of capital gains and for the individual income-tax credits, tax law treats a shareholder occupying their main residence owned by an SCI in the same way as a taxpayer who owns their residence outright - so those particular advantages are preserved. The losses are concentrated on the wealth-tax and inheritance-tax abatements and on the housing and consent protections above.

The further consequences of holding a main home in an SCI

Two smaller consequences remain, and both are easy to overlook.

No early release of employee savings to fund the purchase. An employee can obtain early release of sums held in employee-savings schemes - profit-sharing, the company savings plan, and the retirement-savings plan - to fund the acquisition, construction or enlargement of their main residence. That early release is not available where the residence is acquired through an SCI, because in that case it is the company, not the saver, that owns the home. A buyer counting on unlocking employee savings to help fund a main-home purchase loses that option by routing the purchase through an SCI.

No ten-day cooling-off period on the purchase of the shares. A buyer acquiring a main residence directly benefits from a statutory ten-day withdrawal period after signing the preliminary contract. A person buying shares in an SCI that owns the property intended as their main residence does not have that ten-day withdrawal right on signing the preliminary agreement. The protection built into a direct residential purchase does not extend to the acquisition of shares in the company that owns the home.

A home in an SCI: which protection matters most to you?

The right decision depends on which protection you most need to keep. Pick your priority - the check shows what an SCI does to it and how to respond.

When a main home in an SCI still makes sense

The losses set out above are reasons for caution, not an absolute rule against ever holding a home in an SCI. There are situations where the structure is chosen deliberately, and where its advantages outweigh the protections given up - provided those protections are consciously rebuilt.

The clearest case is an unmarried or PACS couple. They have no spousal double-consent rule to lose and no marital succession protections, so the SCI's downsides on those points do not apply to them - while its ability to protect the survivor through the articles is exactly what they need. Holding the home in an SCI lets them install management succession, an approval clause against the deceased's heirs, a lease securing occupation, and, where suitable, a cross-usufruct exchange or a tontine clause. For them the SCI is not a risk to the home; it is the tool that secures it.

The second case is organised transmission. Where the plan is to pass the home to children over time, the SCI's capacity to move value as shares - in tranches, split between usufruct and bare ownership - is a genuine advantage direct ownership cannot match. A family may accept the loss of the wealth-tax and inheritance-tax abatements on the home in exchange for the transmission efficiency, especially where a reasoned discount on the shares softens the IFI position.

In both cases the discipline is the same: put the home in the SCI on purpose, and rebuild by drafting every protection that still matters - the occupancy agreement or lease that supports the double-consent rule and the survivor's housing right, and the articles that organise management and succession. A home placed in an SCI thoughtlessly loses protections for nothing; a home placed in one deliberately, with the drafting done, can keep most of what matters while gaining what the SCI is for.

A home in an SCI: what you keep and what you lose

Frequently asked questions about a main home in an SCI

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal or tax advice. Whether a main home should be held in an SCI, and how to protect it if it is, depends on the family, the matrimonial or partnership situation, and the objectives. Always seek qualified legal advice - and coordinate with the notary - before placing a main residence in an SCI.