DA-Tax
Property Companies
This article is for general information only. You should not act or refrain from acting in reliance of it. You should always obtain professional advice on the facts of your particular case. Nothing in this article constitutes financial advice. The owner of this site accepts no liability.
France has the concept of a "property company" for tax purposes. Broadly this means any company French or non French which has more than 50% of its assets in French property. These companies are within the French tax net for transfer taxes at 5%, capital gains tax, wealth tax and inheritance tax.
Almost all French companies including SCI's are property companies for these purposes and so buying a French property within an SCI or say a UK limited company does not enable you to avoid French tax.
However if you have shares or cash then for a non French resident there are considerable advantages in using a non French company and ensuring its balance sheet shows French property assets as less than 50% with the rest say cash or shares. There is nothing to stop the rest being UK land.
You could use a Monaco SCI which is treated as a non French company to own the French property.
You will need to check each year that the accounts and actual valuations still show the French property as less than 50% of the total company assets. This is very much one for bespoke advice.
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