Family SCI: status, advantages and procedures 2026

The family property holding company (société civile immobilière, SCI) is a preferred legal and tax tool for organising the holding and transfer of real estate within a family. This structure makes it possible to avoid the constraints of joint ownership on succession (indivision) while optimising the management of family property. Between the changes made by the Finance Act 2024 and recent developments in case law, the family SCI status deserves close examination in order to understand how it works and to assess whether it is appropriate in each family's circumstances.

Definition and legal status of the family SCI

Legal nature of the société civile immobilière

The family SCI falls within the family SCI status defined by Articles 1832 et seq. of the French Civil Code. It is a civil company (société civile) whose purpose is limited to the acquisition, construction, renovation, administration and disposal of real estate. Its family character results from the make-up of its shareholding, which consists exclusively of members of the same family in the broad sense: spouses, descendants, ascendants, brothers and sisters, uncles, aunts, nephews and nieces. The legal nature of the société civile and its general regime under the Civil Code are presented in our article on the definition of the société civile.

This family character carries specific tax consequences, in particular the application of the tax transparency regime provided for by Article 8 of the French General Tax Code. The partners are taxed directly on their share of the company's property income, in proportion to their company rights.

Legal personality and capacity

The family SCI has legal personality from its registration in the trade and companies register (RCS). This separate legal personality gives it the capacity to acquire, hold and dispose of real estate in its own name. Property contributed to or acquired by the company belongs to the SCI as a legal entity, not to the partners individually.

This separation of assets protects the company's property from the personal creditors of the partners, provided the corporate formalities are respected. Conversely, the partners are liable for the company's debts only up to the amount of their contributions, unless they have given a specific personal undertaking.

Corporate purpose and permitted activity

The corporate purpose of a family SCI must be strictly confined to civil real estate activities. The following are in particular permitted: the acquisition of buildings for letting or residential use, construction and renovation, unfurnished or furnished letting as part of the normal management of assets, and the disposal of the company's property.

By contrast, a habitual commercial activity (property development, dealing in property) would cause the loss of civil character and lead to requalification as a commercial company, with the related accounting and tax obligations.

Property and tax advantages

Avoiding joint ownership on succession

The first SCI advantage lies in avoiding joint ownership on succession (indivision). Where a property is jointly owned by several heirs, any decision on management or disposal requires the unanimous agreement of the joint owners, subject to the limited exceptions provided for in Articles 815-3 et seq. of the Civil Code. The property, tax and succession advantages of this structure are presented as a whole in our article on the reasons to set up an SCI.

Holding through a family SCI turns this direct ownership into company rights. Decisions are taken under the rules of the articles of association, generally by a majority of the company shares. A majority partner can thus impose management decisions, subject to compliance with the company's interest.

Facilitating gradual transfer

The creation of a family SCI makes it possible to organise a gradual transfer of real estate by gifts of company shares. These gifts benefit from allowances that are renewable every fifteen years: €100,000 between parents and children, €31,865 between grandparents and grandchildren (Article 779 of the French General Tax Code).

The valuation of the shares may be reduced by applying an illiquidity discount, generally accepted at between 10% and 20% by the tax authorities for shares in a family SCI holding rental property. This discount reduces the base on which gift duties are calculated.

Optimising rental management

A family SCI can optimise the management of its rental assets by pooling costs and professionalising management. Property income is divided among the partners according to their shares, making it possible to use the most favourable tax brackets within the family.

The actual-profit tax regime (régime réel) allows all actual expenses to be deducted: loan interest, renovation works, management costs, depreciation of furnished property. This deduction may create a property income deficit that can be set against overall income, up to €10,700 per year (Article 156 of the French General Tax Code).

Protection against personal creditors

Company shares can be seized by the personal creditors of a partner only under restrictive conditions. Article 1857 of the French Civil Code provides that the creditor may bring about the sale of the shares only after having unsuccessfully sought recovery from the debtor's other assets.

This protection is particularly useful for members of the liberal professions or business owners exposed to professional or commercial liability risks.

Creation procedure and formalities

Drafting the articles of association

The creation of a family SCI begins with the drafting of the articles of association, the founding document that determines how the company operates. The articles must necessarily state: the company name, the corporate purpose, the registered office, the term (limited to 99 years), the amount of the share capital and its allocation among the partners.

The clauses relating to management deserve particular attention. The manager (gérant) may be a partner or a third party, an individual or a legal entity. The manager's powers are defined by the articles and may be limited for certain acts (disposal, mortgaging). Article 1849 of the French Civil Code provides that the manager binds the company by acts falling within the corporate purpose, subject to limitations in the articles that are enforceable against third parties if they are published.

Constitution of the share capital

The share capital may be made up of cash contributions (sums of money) or contributions in kind (real estate). Contributions in kind require a valuation by a contribution auditor (commissaire aux apports) if their value exceeds €30,000 or if the contributions in kind represent more than half of the capital (Article 1843-3 of the French Civil Code).

The contribution of a property must be made by notarial deed if its value exceeds €76,225. This contribution may give rise to registration duties at the rate of 5% (Article 809-I of the French General Tax Code), unless the contributor retains shares proportionate to their initial contribution.

Registration formalities

Registration with the RCS is made with the competent business formalities centre. The file includes in particular: the signed articles of association, the manager's declaration of no criminal conviction, the certificate of publication in a legal notices newspaper, and form M0.

This registration confers legal personality on the SCI and allows a business bank account to be opened. Some banks require a minimum capital of €1,000, although the law imposes no minimum amount.

Management and day-to-day operation

Powers and liability of the manager

The manager has the widest powers to act in the name of the company, within the limits of the corporate purpose. The manager may in particular sign leases, collect rent, commission maintenance works, and represent the company before the courts.

The manager's civil liability may be engaged in the event of mismanagement causing loss to the company or to third parties. Articles 1850 and 1851 of the Civil Code provide that the manager may be removed under the conditions set out in the articles, or by the court for lawful cause. On the removal of the manager and the other sanctions incurred in the event of abusive management, see our analysis of the abusive SCI manager.

General meetings and decision-making

Collective decisions of the partners are taken at an ordinary general meeting or by written consultation. Extraordinary decisions (amendment of the articles, change of corporate purpose) generally require unanimity, unless the articles provide otherwise.

Notice of the meeting must be given at least fifteen days in advance, stating the agenda. Decisions are recorded in minutes signed by the manager and kept at the registered office.

Keeping the accounts

A family SCI under the tax transparency regime is not required to prepare annual accounts. It must nevertheless keep simplified accounts enabling it to justify its transactions: a record of receipts and expenditure, a statement of assets, bank statements.

If the SCI opts for corporation tax or exceeds certain thresholds (€120,000 of rental receipts), it becomes subject to the accounting obligations of traders: double-entry bookkeeping and the preparation of a balance sheet and a profit and loss account.

Tax regime and available options

Tax transparency regime by default

By default, a family SCI falls within the tax transparency regime. Property income is taxed directly in the hands of the partners, in proportion to their company rights, at the progressive income tax scale.

This tax transparency also applies to real estate capital gains. Where the SCI sells a building, the gain is taxed in the hands of the partners according to their share, with the allowances for length of holding provided for in Articles 150 VC and 150 VD of the French General Tax Code.

Option for corporation tax

A family SCI may irrevocably opt for corporation tax under Article 206-3 of the French General Tax Code. This option has certain advantages: a fixed tax rate (15% up to €42,500 of profits, then 25%), the possibility of deducting the manager's remuneration, and the building up of reserves.

However, this option results in double taxation: profits are taxed at company level, and distributions to partners are then subject to the 30% flat-rate withholding tax (prélèvement forfaitaire unique) or to the progressive scale with a 40% allowance.

Consequences of the IFI

Real estate held by a family SCI falls within the base of the partners' real estate wealth tax (impôt sur la fortune immobilière, IFI), in proportion to their company rights. The value used is the market value of the property, less the company's debt.

The partners may benefit from a 30% allowance on the value of their main residence, even if it is held by the SCI, provided they actually occupy it as their main residence.

Limits and constraints to consider

Formalities and running costs

A family SCI imposes heavier formalities than direct holding: holding general meetings, specific tax returns, amendment of the articles on a change of partner. These obligations generate recurring costs: bank charges, advisory fees, registration costs.

The transformation of an SCI or its early dissolution may also give rise to significant tax costs, in particular as regards registration duties and real estate capital gains.

Rigidity of the structure

Once set up, a family SCI is to some extent rigid. Transfers of shares between partners or to third parties are strictly regulated by the articles, often with approval (agrément) or pre-emption clauses.

The exit of a minority partner may prove complex if the articles do not provide for a mechanism to value the shares or for a compulsory buy-back by the company.

Risks in the event of family disagreement

Family conflicts may paralyse the operation of an SCI, in particular where important decisions require unanimity. A minority partner may block certain decisions or challenge the manager's management before the courts.

Preventing these conflicts requires careful drafting of the articles, defining precisely the manager's powers and the procedure for collective decision-making.

Frequently asked questions

What is the minimum capital to set up a family SCI? No minimum capital is legally required to set up a family SCI. However, a token capital of one euro is not recommended because it may cause practical difficulties (opening a bank account, credibility with partners). Capital of €1,000 to €5,000 is a reasonable basis for most family projects.

Can a family SCI be managed by a third party who is not a partner? Yes, Article 1846 of the French Civil Code expressly authorises the appointment of a manager who is not a partner. This solution may be useful to professionalise management or to maintain neutrality in the event of family tension. A third-party manager incurs civil liability on the same terms as a manager who is a partner.

How should shares in a family SCI be valued for a gift? The valuation of the shares is based on the revalued net assets of the company (market value of the property less debts), subject to an illiquidity discount generally of between 10% and 20%. The tax authorities accept this discount given the difficulty of selling shares in a family SCI. A recent property valuation strengthens the justification for the valuation adopted.

Does the family SCI give complete protection against creditors? The protection is only relative. While the company's property is in principle beyond the reach of the partners' personal creditors, they may obtain the allocation or forced sale of the company shares after having unsuccessfully sought recovery from the debtor's other assets. In addition, the company's creditors may seize the SCI's entire estate.

Can a family SCI be converted into a commercial SCI? Such a conversion does not exist in law. However, an SCI may lose its civil character if it develops a habitual commercial activity (development, dealing in property). It then becomes commercial in fact, with all the related obligations. To carry on a commercial real estate activity, a separate commercial company (SARL, SAS) should be set up.

What are the accounting obligations of a family SCI under tax transparency? A tax-transparent family SCI is not required to prepare annual accounts. It simply has to keep cash accounts (receipts and expenditure) and retain supporting documents. If it opts for corporation tax or exceeds €120,000 of rental receipts, it becomes subject to commercial accounting obligations.

How can a partner leave a family SCI in the event of disagreement? Several mechanisms allow an exit: transfer of shares to another partner (subject to approval clauses), buy-back by the company if the articles so provide, or judicial dissolution for serious disagreement between partners. Article 1844-7 of the Civil Code also allows a partner to request their own exclusion for good cause. As a last resort, amicable or judicial dissolution of the company allows all the partners to exit.

The family SCI remains a powerful asset management tool provided its constraints are anticipated and its structure is adapted to the family objectives pursued. Given the growing complexity of company law and real estate taxation, dedicated legal support is needed to secure the setting up and to optimise the operation of this structure.