French SCI or direct ownership: which structure for short-term letting?
It is the question owners most often ask us before signing. The SCI (real estate civil company) is attractive for succession planning and joint acquisition — yet its compatibility with furnished tourist letting hides a little-known fiscal trap. Here is a clear analysis to decide with eyes open.
Why this question really matters for short-term rental
The French SCI has a strong reputation for inheritance planning, divorce protection, and joint family or partnership purchases. Many investors assume it transposes mechanically to short-term letting. But furnished tourist rental is legally a commercial activity, which creates a fundamental incompatibility with a standard SCI taxed at the personal income tax level (SCI à l'IR). An investor placing a chalet in an income-tax SCI to let it on Airbnb may unknowingly tip the entire company into corporate income tax — with heavy fiscal consequences. This question must be settled before the notary appointment, not after.
Income-tax SCI: incompatible with furnished tourist rental
The rule is clear: as soon as furnished rental receipts exceed 10 % of the SCI's total revenue, the tax authority reclassifies the company under corporate tax (IS), automatically and irreversibly. For a property purely let on Airbnb, this threshold is breached from the first night. An income-tax SCI operating short-term lets therefore loses its original tax regime immediately. The shareholders find themselves in a framework they neither chose nor anticipated, with considerably more complex taxation and — crucially — future capital gains taxed as commercial gains, eliminating the favourable holding-period allowance available to individuals.
Corporate-tax SCI: a coherent framework with a sting
Choosing a corporate-tax SCI from the outset makes the structure fully compatible with furnished letting. Key advantage: the ability to depreciate the property and furniture over 20–30 years, which accounting-wise wipes out taxable profit for a decade or more. Drawback: double taxation. Profit is first taxed at 15 % then 25 % at company level, then again on dividend distribution (30 % flat tax). And critically, the resale capital gain is calculated on the depreciated net book value — the more you have depreciated, the higher the taxable gain on exit. This is a structuring patrimonial choice, not a casual management vehicle.
LMNP in direct ownership or co-ownership: often the best option
For the vast majority of owners letting a single property short-term, the Non-Professional Furnished Lessor (LMNP) status under the actual expenses regime, held directly, remains the most efficient option. It combines property depreciation, near-zero taxation for 10–12 years, and the favourable individual capital gains regime on resale — far more advantageous than corporate gains. For a joint purchase, simple co-ownership (indivision) is usually sufficient without setting up a company. The corporate-tax SCI only becomes relevant for complex inheritance planning, substantial portfolios, or strategies that reinvest cash flow across multiple properties. Our recommendation: spend 30 minutes with a notary and a specialist accountant BEFORE you sign, never after.
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