{"id":33899,"date":"2026-05-28T09:47:07","date_gmt":"2026-05-28T09:47:07","guid":{"rendered":"https:\/\/luxuryproperties.fr\/sci-and-furnished-rentals-is-it-possible\/"},"modified":"2026-06-24T11:34:28","modified_gmt":"2026-06-24T11:34:28","slug":"sci-and-furnished-rentals-is-it-possible","status":"publish","type":"post","link":"https:\/\/luxuryproperties.fr\/en\/sci-and-furnished-rentals-is-it-possible\/","title":{"rendered":"SCI and furnished rentals: Is it possible?&#8230;"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>A brief overview of the rules you need to know.<\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">As we know, the \u201cC\u201d in SCI stands for \u201cCIVILE.\u201d By definition, an SCI must and can only engage in a civil activity: unfurnished rentals, among other things. It is normally and typically subject to income tax (IR) due to its civil activity.  <\/p>\n\n<p class=\"wp-block-paragraph\">But the question often arises as to whether an existing SCI is permitted to engage in furnished rentals, which is, by definition, a commercial activity within the meaning of<a href=\"https:\/\/www.legifrance.gouv.fr\/affichCodeArticle.do?cidTexte=LEGITEXT000005634379&amp;idArticle=LEGIARTI000006219125\">Article L.110-1 of the Commercial Code<\/a>. Paragraph 4 of the article defines as a commercial act <em>\u201cany business engaged in the rental of furnishings.\u201d<\/em> <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>In principle, therefore, an SCI and furnished rentals do not appear to be compatible. However, there are two exceptions and allowances, subject to certain conditions. Here are the details:  <\/strong><\/p>\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n<p class=\"wp-block-paragraph\"><strong><em>1. An SCI subject to income tax but with limited commercial impact<\/em><\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">First exception: if the furnished rental is ancillary to the SCI\u2019s main business (unfurnished rental). An SCI can then maintain its tax transparency (without risking being subject to corporate income tax in the event of an audit) by ensuring that it limits the impact of its commercial income from furnished rentals. The partners are subject to income tax (IR). They report the portion of profits corresponding to their share of the company\u2019s capital. They pay tax on these profits as part of their annual income tax return. If applicable, they may qualify for the status of non-professional furnished property landlord (LMNP).     <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>To qualify, the income from furnished rental activity must not exceed 10% of the<\/strong> SCI\u2019s <strong>total income<\/strong>. An exceptional exception is permitted if the average revenue for the current year and the three preceding years does not exceed the 10% threshold. Finally, furnished rentals must remain an occasional activity and be of short duration. They must not be a regular practice. This is why, generally speaking, this applies to an SCI that owns only a single property listed on Airbnb, for example.    <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>SCIs and seasonal rentals<\/strong> are therefore compatible, but only if this is not the SCI\u2019s primary or usual business activity and if the threshold is met. Consequently, an SCI may engage in LMNP activities. <\/p>\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n<p class=\"wp-block-paragraph\"><strong><em>2. The SCI subject to corporate income tax<\/em><\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">Second exception. According <a href=\"https:\/\/www.legifrance.gouv.fr\/codes\/article_lc\/LEGIARTI000045765504#:~:text=2%C2%B0%20Lorsqu%27elles%20n,%C3%A0%20l%27article%20219%20bis.\">to Article 206(2) of the General Tax Code<\/a>, unincorporated partnerships that engage in business activities or operations of an industrial or commercial nature within the meaning of Articles 34 and 35 of the General Tax Code are subject to corporate income tax (IS). Thus, the customary practice of renting furnished properties through an SCI, even on a secondary basis, renders the SCI a commercial entity by virtue of its purpose.  <\/p>\n\n<p class=\"wp-block-paragraph\">The SCI must then opt for corporate income tax (IS) rather than individual income tax (IR), and may rent out furnished units (note: it will not be able to change this decision later). While engaging in a commercial activity does not result in the company\u2019s dissolution, it does require the company to be subject to the corporate income tax (IS) regime pursuant to paragraph 2 of<a href=\"https:\/\/www.legifrance.gouv.fr\/affichCodeArticle.do?cidTexte=LEGITEXT000006069577&amp;idArticle=LEGIARTI000006308475\">Article 206 of the General Tax Code<\/a>. <\/p>\n\n<p class=\"wp-block-paragraph\">In this case, all of its profits will be subject to this tax (even those derived from any non-commercial activity, due to \u201ccommercial contamination\u201d). In the case of <strong>furnished rentals, the SCI subject to corporate income tax<\/strong> has all its profits taxed under the corporate income tax system. There is no distinction between rental income from an unfurnished property (civil activity) and that from a furnished property (commercial activity). The SCI is responsible for paying the tax. The partners, for their part, will pay tax only if they receive dividends paid by the SCI. The SCI will be able to deduct its expenses from its revenue and will be taxed only on its profits. In addition, an SCI subject to corporate income tax may depreciate the purchase of its real estate.      <\/p>\n\n<p class=\"wp-block-paragraph\">Please note that being subject to corporate income tax has numerous consequences for the company. It offers some advantages but also has disadvantages. Opting for corporate income tax requires compliance with the tax and accounting obligations associated with this tax regime. Among other things, the SCI must maintain accounting records. It is required to depreciate the property, prepare annual financial statements, and have its members vote on the distribution of the annual profit at the annual general meeting (AGO).    <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>A brief summary table of the advantages and disadvantages of SCI entities subject to corporate income tax:<\/strong><\/p>\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/media.licdn.com\/dms\/image\/v2\/D5612AQGh3nDdpEqsqA\/article-inline_image-shrink_1000_1488\/article-inline_image-shrink_1000_1488\/0\/1694185051343?e=1781740800&amp;v=beta&amp;t=_kvfSCpHNp8fvaL5o_wTcyW8-QKCj3BjxkNFjNRW6K0\" alt=\"Article Contents\"\/><\/figure>\n\n<p class=\"wp-block-paragraph\"><strong>Editor\u2019s Note: It\u2019s worth noting here that the main benefit of the LMNP is the ability to depreciate the property, but this isn\u2019t possible with an SCI subject to income tax; therefore, you\u2019ll be charging rent as if the property were furnished, but the tax treatment will be the same as for unfurnished rentals&#8230; So there\u2019s not much of an advantage \ud83d\ude09 <\/strong><\/p>\n\n<p class=\"wp-block-paragraph\"><strong>As for an SCI subject to corporate income tax, there\u2019s a 25% tax on capital gains from resale and a 30% \u201cflat tax\u201d on any remaining funds after dissolution (dissolution bonus): there\u2019s no longer any point in investing in this case \ud83d\ude09<\/strong><\/p>\n\n<p class=\"wp-block-paragraph\"><strong>So the best option is still the LMNP under the actual-cost method, whether as a sole proprietor or as a joint owner&#8230; QED \ud83d\ude09 <\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">We therefore recommend that you consult a tax attorney before undertaking any project; they will be able to advise you on the best option tailored to your personal situation. If needed, please contact us, and we will refer you to several attorneys. <\/p>\n\n<p class=\"wp-block-paragraph\">Best regards,<\/p>\n\n<p class=\"wp-block-paragraph\"><strong>Richard BELLANGER &#8211; CEO<\/strong><\/p>\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.haussmannprestige.fr\/\"><strong>Haussmann Prestige Paris<\/strong><\/a><\/p>\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.linkedin.com\/in\/realestateinfrance\/\"><\/a><a href=\"https:\/\/www.linkedin.com\/in\/realestateinfrance\/\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A brief overview of the rules you need to know. As we know, the \u201cC\u201d in SCI stands for \u201cCIVILE.\u201d By definition, an SCI must and can only engage in a civil activity: unfurnished rentals, among other things. It is normally and typically subject to income tax (IR) due to its civil activity. But the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":33900,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[440],"tags":[],"class_list":["post-33899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-annuity-bare-ownership"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SCI and furnished rentals: Is it possible?... - Luxury Properties - La Maison fran\u00e7aise de l&#039;immobilier de luxe<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/luxuryproperties.fr\/en\/sci-and-furnished-rentals-is-it-possible\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SCI and furnished rentals: Is it possible?... - Luxury Properties - La Maison fran\u00e7aise de l&#039;immobilier de luxe\" \/>\n<meta property=\"og:description\" content=\"A brief overview of the rules you need to know. 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