Buying a Property Through a Company. The Complete Guide.

Before diving into the structures, it's worth understanding why buyers consider this route in the first place. The motivations are usually one or more of the following:

Inheritance planning: France applies réserve héréditaire (forced heirship), meaning your children automatically inherit a portion of your estate regardless of your will. Owning through a company can offer more flexibility in how property passes to the next generation.

Joint ownership flexibility: When multiple people buy together — a couple, siblings, business partners — a company structure can make management and eventual exit much cleaner than indivision (direct co-ownership).

Asset protection: Separating property from personal assets can protect it from business creditors.

Tax optimisation: Depending on your tax residency and the structure chosen, there can be significant differences in how rental income, capital gains, and wealth tax are calculated.

Privacy: In some cases, buyers prefer that their name does not appear on the land registry directly.

These are all legitimate reasons. But the execution matters enormously, and choosing the wrong structure can turn an optimisation strategy into an expensive mistake.

A Société Civile Immobilière (SCI) is a specific type of French civil company created for the sole purpose of owning and managing real estate. It is not a commercial company — it cannot conduct business activities. Think of it as a purpose-built vehicle for property holding. The SCI is by far the most common structure used by both French and international buyers.

Key features: No nationality restrictions — foreign individuals can create and own shares. Minimum two shareholders required. Must be created before the purchase — once the acte de vente is signed in your personal name, you cannot simply transfer the property into an SCI later without incurring a full resale and additional transfer taxes. Setup takes 2–4 weeks and costs approximately €1,000–3,000. Requires ongoing administration including annual general meetings and proper accounts.

Two tax regimes exist: SCI à l'IR (Income Tax) where the company is fiscally transparent and each shareholder is taxed individually — best for families and long-term holdings thanks to taper relief that can eliminate capital gains tax entirely after 22–30 years. SCI à l'IS (Corporate Tax) where rental income is subject to corporate tax (25%) but depreciation can reduce taxable profit — however, this fundamentally changes capital gains calculation on sale and the individual taper relief no longer applies.

The choice between IR and IS is irrevocable. This decision should be made with a qualified tax advisor.

Important limitation: a standard SCI cannot engage in furnished rentals (location meublée). If you plan to rent furnished — common for seasonal lets on the Côte d'Azur — consider a SARL de famille instead.

The inheritance benefit is one of the primary reasons international buyers choose an SCI. French law allows tax-free donations of up to €100,000 per parent per child every 15 years. By donating SCI shares over time, a family can substantially reduce or eliminate inheritance tax. An abattement of approximately 10–15% is also commonly applied to the valuation of SCI shares, since they are less liquid than direct property ownership.

There is no legal prohibition preventing a UK Limited company, a Luxembourg Sàrl, a Swiss AG, a Delaware LLC, or any other foreign entity from purchasing property in France. But the tax consequences can be devastating.

The 3% Annual Tax (TVVI): The Taxe sur la Valeur Vénale des Immeubles targets entities owning property in France. All French and foreign entities that directly or indirectly own real estate in France are subject to an annual tax of 3% of the fair market value. A villa worth €2 million means a potential annual tax bill of €60,000. Every year. Assessed on current market value, not the original purchase price. And unlike the IFI wealth tax, you cannot deduct outstanding mortgages.

Broad exemptions exist but require proactive compliance — typically filing Form 2746 by May 15 each year, disclosing all shareholders and property details. Automatic exemptions apply to EU companies and companies in treaty countries with administrative assistance clauses. For entities in non-treaty offshore jurisdictions, the annual filing is mandatory. Miss it, and the 3% tax becomes immediately due, with potential recovery for the previous six years.

The "Benefit in Kind" trap: When a property owned by a company is occupied rent-free by its shareholders, a benefit in kind must be recorded. The company must declare fictitious rental income at market rates and pay tax on this hypothetical income. French tax authorities routinely make adjustments during audits.

Capital gains — the real killer: When an individual sells after long-term ownership, taper relief can eliminate capital gains tax entirely after 22–30 years. When a foreign company sells, none of this applies. On a property purchased for €500,000 and sold for €700,000 after 15 years, the individual owner might face approximately €4,000 in tax. The same sale through a UK company could generate approximately €45,000 in French corporation tax — more than tenfold difference.

Some international buyers present the notaire with complex ownership chains: a BVI holding company owned by a Cayman trust controlled by a Panama foundation. These structures are not inherently illegal, but they trigger maximum scrutiny.

The notaire is legally required to identify every ultimate beneficial owner (UBO) in the chain, verify their identity with original documentation, demand proof of source of funds at every level, assess whether the structure has genuine economic substance, and file a TRACFIN declaration if anything appears suspicious. If the notaire cannot establish clear beneficial ownership, they are legally obligated to refuse the transaction.

In December 2025, the EU added the British Virgin Islands to its high-risk third countries list. Any BVI entity purchasing French property now automatically triggers enhanced due diligence. Many advisors now recommend restructuring away from BVI before proceeding.

The most serious risk is an abus de droit (abuse of rights) challenge by French tax authorities. If they determine that the foreign domiciliation serves a purely fiscal purpose with no genuine economic substance, they can disregard the company entirely, reassess all prior tax returns, impose penalties of up to 80%, and pursue criminal proceedings in extreme cases.

Buying a primary or secondary residence with your spouse or family? → French SCI à l'IR is almost always the best choice. Set it up before the purchase, structure the shareholding to reflect your inheritance planning goals, and enjoy the long-term taper relief on eventual resale.

Investing for unfurnished rental income? → SCI à l'IS can work well for properties generating significant rental income, as depreciation reduces taxable profit. But understand that you sacrifice the individual capital gains taper relief on sale.

Planning to do furnished rentals or seasonal holiday lets? → A SARL de famille may be more appropriate if all shareholders are family members. Alternatively, direct personal ownership with LMNP (Loueur Meublé Non Professionnel) status offers attractive depreciation benefits.

Considering using your existing foreign company? → Talk to a cross-border tax advisor before doing anything. The 3% annual tax, benefit-in-kind rules, unfavourable capital gains calculation, and ongoing compliance obligations make foreign company ownership significantly more expensive than most buyers anticipate.

Coming through a complex offshore structure? → Expect significantly more paperwork, longer timelines, and intensive notaire scrutiny. Consider whether simplifying the structure before the purchase might save you time and money.

1. Creating the SCI after signing the compromis de vente. The structure must be in place before the preliminary contract is signed. Restructuring after the fact requires a full resale, double notaire fees, and double transfer taxes.

2. Choosing IS when IR would be better. The IS/IR choice is irrevocable. Don't opt for corporate taxation without detailed long-term modelling — particularly if you plan to hold the property for more than 10–15 years.

3. Using a foreign company without understanding French tax consequences. The 3% tax alone can wipe out any perceived tax benefit within a few years.

4. Forgetting the annual Form 2746 filing. Missing the May 15 deadline turns an exempt structure into a fully taxable one, retroactively.

5. Assuming "no one will notice." France's tax administration has become increasingly sophisticated in detecting foreign-held property structures, with automatic exchange of information agreements covering over 100 jurisdictions.

6. Not declaring benefits in kind. If a company property is used personally by shareholders, the fictitious rental income must be declared. Tax auditors specifically look for this.