France's family SCI structures face tax and inheritance pitfalls

The Société civile immobilière (SCI) is a long‑standing French legal form used to pool shareholders for the management of real estate. It is frequently created by families to preserve assets and facilitate inter‑generational transmission, allowing property to be divided into shares that can be gifted or bequeathed. Donations to children can benefit from a €100,000 tax allowance every 15 years, and arrangements such as usufruct or bare‑ownership can separate use from ownership.

However, purchasing a primary residence through an SCI precludes access to several French housing incentives, including zero‑interest loans (PTZ), the housing savings plan (PEL), early retirement‑savings plan withdrawals (PER), and the MaPrimeRénov’ renovation aid. Tax advantages are also reduced: the 20 % inheritance‑tax allowance and the 30 % IFI (real‑estate wealth tax) exemption may be lost. Spousal protection is weaker, as a surviving spouse may not obtain temporary residence rights. Moreover, if the SCI’s statutes are poorly drafted, shareholders – including children – can be personally liable for debts proportionate to their shareholding. Properly structuring the statutes to limit liability is therefore essential.