Société Civile Immobilier and lettings shock!


(Ley Thompson) #1

Hi Everyone,


I wonder if anyone can shed any light on something that is happening to me. Yesterday I was informed by my Notaire that it is now forbidden for a house owned by an SCI to be let as furnished accommodation either for long term or for chambres d'hotes etc. This has come as a complete shock as we have been renting our house in the summer for years. We have never had any communication from the powers that be telling us of these changes and I am now worried that we are breaking the law if we carry on our tiny business. Seemingly some people/companies are using SCIs to avoid corporation tax. We have run the business as a 'Micro Enterprise' paying all taxes etc that have been required and all through accountants and verified etc.


Rentals are my only income so this spells disaster for me if it's correct. We (there are three of us), bought as an SCI 20 years ago as advised at the time to avoid the French inheritance laws. This is no longer necessary, as you know, we can now leave our assets under British law. I wonder how easy it would be to change from an SCI to a simple ownership so that we can continue to let. Or has our Notaire got it wrong? (Which I doubt).


If anyone knows anything about this please share.


Worried of Saint Aulaye (24) :-(


Otherwise known as Ley


Thanks


(Ley Thompson) #2

Thanks to everyone for your thoughts and advice. I have found this document through Google today and, if the law hasn't changed, then it seems there is a way around the rules on not letting furnished accommodation through an SCI. One associate of the SCI can obtain permission from the gerant of the SCI to sub-let and pay taxes through that individual's personal tax return ie through a Micro BIC. This is in fact what we have been doing! Phew!!! Panic over (I hope).

http://hm.votrecabinet.com/img/Furnished_letting_of_a_property_held...

Thanks again.


(Ley Thompson) #3

Thanks Trish, diving into all that now. very helpful :-)


(trish daniels) #4

http://sci.comprendrechoisir.com/astuce/voir/187487/les-dangers-de-la-location-meublee-dans-une-sci


(Krister Rosendahl) #5

It does say: "If an SCI lets a furnished property, the income becomes subject to corporation tax, not income tax, as does any capital gain on disposal." So forbidden it is not, but has tax consequences. The accountant should have been aware of this.


(Krister Rosendahl) #6

Based on that description, it's not forbidden in any way. There are "only" tax consequences.


(john locke) #7

i think the problem is not letting but letting a "furnished" property..perhaps look into making it unfurnished


(Simon Armstrong) #8

No idea about the fact properties bought via SCI's can't be rented - I thought that was one of the main purposes of an SCI! Seems a bit odd....maybe worth further investigation / clarification....

I do know however know, it's very expensive to dissolve an SCI - essentially the main dissolution charges are based on 7.5% of the current value of the property - less some allowances for property improvements but... plus notarial fees, capital gains tax, liquidation tax on any other net assets held (cash etc).

Essentially just about everyone takes a cut with a significant amount of admin, court presentations and even newspaper ad's declaring the dissolution. Lots of info online but your notaire will know the score.


(john locke) #9

good advice ..but I would talk to a lawyer rather than a Notaire who tend to just follow the rules rather than find a "creative" solution


(Graham Lees) #10

Personally, I would ask your Notaire rather than rely on the myriad responses you might get from a public forum (good as this one is!).

But, for what it is worth, if the Notaire's info is correct then I would guess the SCI would have to 'sell' the property to the individuals with all the current taxes and administration that would entail.


(john locke) #11

I dont know how good your french is but this explains it http://sci.comprendrechoisir.com/astuce/voir/187487/les-dangers-de-la-location-meublee-dans-une-sci