Buying French Property Through an SCI as an American: Costs, Tax and the Tontine

An American can buy French property through an SCI (société civile immobilière), a French civil company of at least two associés (members) that owns the property while you own its shares. It helps when several people buy together or when you plan to pass a property on in stages, but it removes neither French inheritance tax nor forced heirship, and for a US citizen it adds a foreign entity that the IRS classifies and wants reported. This guide covers what creating one costs in 2026, how France taxes it, what it changes for inheritance, how the tontine clause compares, what the IRS pages say, and when your own name is simpler. This article is for informational purposes only and does not constitute legal advice. Rules change, and your situation may differ: always verify current requirements with the relevant French authorities or a licensed professional.

What Is an SCI in France?

An SCI is a civil company whose purpose is to acquire or build property and then manage it, and it must have at least two associés, who can be individuals or companies. It has its own legal personality and is run by a gérant (manager). Two spouses can form one together, whatever their marriage regime (page checked on October 7, 2025).

The activity has to be civil: renting out unfurnished property is the typical case. Furnished rental is commercial, and an SCI can carry it on only as a side activity; buying to resell is prohibited, and service-public points to a commercial company (SAS or SARL) for it. The associés set the capital freely, from 1 euro, in cash or in property contributed to the company.

With an SCI the company’s name is on the deed and you hold parts sociales (shares). The purchase itself follows the steps of our guide to the compromis de vente, the notaire’s role and closing day.

How to Create an SCI and What Registration Costs in 2026

Creating an SCI takes signed statuts (articles of association), a legal notice, an online registration and a declaration of beneficial owners. The regulated costs are 60.38 euros for registration, 19.33 euros for the beneficial owners and 191 euros before tax for the legal notice in mainland France in 2026.

The steps, as service-public describes them for any company:

• Statuts. The company exists from the day they are signed. They state the name, the legal form, the registered office, each contribution, the capital, the purpose and a duration of 99 years at most, and for an SCI the gérant and the split of the shares. The associés can write them with or without a lawyer or a notaire, but a notaire is mandatory when real estate is contributed to the capital.
• Legal notice. A notice of incorporation is published before registration.
• Registration. The file goes through the Guichet des formalités des entreprises, the single online counter.
• Beneficial owners. Every person who holds, directly or indirectly, more than 25% of the capital or of the voting rights is declared at registration, and any change within 30 days. The register is no longer open to the general public.

Source: Service Public Entreprendre, cost of registering a company, legal notice rates for 2026 and drafting the statuts.

These are the costs of the company only: the purchase adds the transfer taxes and the notaire’s fee. No official page gives a time to registration; the counter’s requests for missing documents are described in our guide to registering a French company through the Guichet unique.

How an SCI Is Run: The Gérant, the Votes and Your Liability

The gérant acts within the powers the statuts give, the associés decide the rest, and every associé is liable for the company’s debts without limit, in proportion to their shares.

Service-public describes the liability of the associés as indefinite, not joint and subsidiary: your personal assets can be called on beyond what you put in, only for your share of the debt, and only after the creditor has failed to recover from the company. An SCI can borrow in its own name, with the members giving personal guarantees, as our guide to French mortgages for US citizens explains.

The statuts set the quorum and the majority. Where they are silent, decisions beyond the gérant’s powers need all the associés, while the gérant can be removed by a majority.

How Is an SCI Taxed in France?

By default an SCI pays no tax itself: it falls under income tax, and each associé is taxed personally on a share of the result in proportion to their shares, whether or not the money was distributed. One tax does sit on the company: every entity that owns French real estate on January 1 is within the yearly 3% tax on its market value, and the tax administration states that an SCI is dispensed from the related form 2746 when it files form 2072 each year; an SCI that does not must either file form 2746 by May 15 or commit to give the tax office, on request, its properties and the identity of its associés. The company can instead opt for corporate tax (next section).

If the SCI rents unfurnished. It files a yearly return, form 2072-S when all the associés are individuals or 2072-C in other cases, online and no later than the second business day after May 1. Each associé reports their share as revenus fonciers (property income). The flat-rate micro-foncier regime does not apply in principle: it is open only if you also own an unfurnished rental directly and your gross property income, your share included, stays under 15,000 euros. A non-resident is taxed in France too: impots.gouv.fr lists shares in property companies among a non-resident’s taxable French property income, with social levies of 17.2% on unfurnished rental. See our walkthrough of the French income tax return.

If the associés simply live there. An SCI that houses its associés free of charge files form 2072-S once, in the year it is created, and is then dispensed from the yearly return while its capital, its properties and the occupation are unchanged, it has no income, and it pays the associés nothing.

If the SCI sells. The gain is taxable in the name of each associé present on the day of the sale, in proportion to their shares: 19% income tax and 17.2% social levies, as for a direct owner. The notaire files the declaration and pays the tax. The allowances for the length of ownership apply (no income tax after 22 years, no social levies after 30), and an associé can claim the main-residence exemption in proportion to their stake when the home was at their free disposal as their main residence. The rest of a sale, tax representative included, is in our guide to French property taxes for US owners.

Furnished rental is the trap. It is commercial. Once commercial activity passes 10% of turnover before tax, it is no longer a side activity and the SCI moves to corporate tax.

The Corporate Tax Option: IR or IS?

An SCI can opt for the impôt sur les sociétés (IS, corporate tax): the company then pays 25% on its profit, or 15% up to 42,500 euros under conditions, and the associés declare the dividends they receive. The option is notified before the end of the third month of the fiscal year concerned, can be revoked until the fifth fiscal year after the one it was made for, and is irrevocable after that.

Source: Service Public Entreprendre, the SCI and impots.gouv.fr, declaring the results of an SCI.

The official pages give the rules, not which regime costs less: that is an accountant’s calculation. For an American, the French option and the US classification are also two separate decisions on two separate forms.

What an SCI Changes for Inheritance, and What It Does Not

An SCI changes what your heirs receive (shares instead of a building) and makes it easier to give in stages, but the shares remain subject to French inheritance tax and to forced heirship. What it helps with:

• Gifts in stages. Shares can be given a few at a time, within the allowance of 100,000 euros per child, or 31,865 euros per grandchild, renewable every 15 years.
• Démembrement. Shares can be split between usufruit (the right to use and to collect the income) and nue-propriété (bare ownership). Notaires de France states that on the death of the usufructuary the bare owners become full owners without paying inheritance duties.
• No indivision among heirs. Heirs who inherit a building hold it in indivision (undivided co-ownership), where a sale needs all of them. With an SCI they inherit shares and the statuts keep governing the property.

What it does not do:

• Remove inheritance tax. A surviving spouse or PACS partner is exempt and a child has a 100,000 euro allowance per parent, with or without an SCI. The scale is in our guide to French forced heirship, Brussels IV and succession tax.
• Override the reserve. The share French law reserves for your children applies to SCI shares as it does to a house.
• Keep the main-home allowances. Service-public lists as drawbacks that the 30% allowance on the main residence for the wealth tax and the 20% allowance on the deceased’s main residence for inheritance tax do not apply through an SCI.

The IFI, the real estate wealth tax, counts the shares for the property the company holds. It is due when your net taxable real estate exceeds 1,300,000 euros on January 1, 2026; a non-resident is taxed on French property only, and so is a new resident for five years. See how the IFI treats property held through a company and, for a couple where one spouse is not a US citizen, the US estate tax rules.

Selling Your SCI Shares: The 2026 Rules

Leaving an SCI means selling shares, which normally requires the other associés’ approval and, since June 27, 2026, a deed drawn up by a professional. The service-public page on the sale of SCI shares (checked on July 9, 2026) gives the rules:

• Approval (agrément). A sale to an outsider needs the associés’ approval. The company has three months to decide, and silence counts as approval. After a refusal the shares must be bought back within three months, failing which the seller can go ahead; but when the seller has held the shares for less than 2 years, the associés and the company are not obliged to buy them, unless the statuts say otherwise.
• Form. Since June 27, 2026, when the SCI’s assets are mainly real estate (the most frequent case), the sale is void unless made by a notaire’s deed, a deed countersigned by a lawyer or, in certain cases only, a private deed drafted by a chartered accountant.
• Registration. The deed is registered with the tax office within one month. The duty, normally paid by the buyer, is 5% for such a company.

The sale also produces a taxable gain or loss for the seller: have the notaire compute it before you sign.

What Is a Tontine Clause in a French Property Deed?

A tontine clause (pacte tontinier) is written into the deed of purchase: the buyer who survives is treated as the owner from the start, and the heirs of the one who dies first have no right to the property.

Notaires de France sets out how a purchase with a tontine clause works (page updated on April 15, 2019):

• It protects the survivor. The property does not enter the estate of the first to die.
• It locks you in. Every act needs unanimity, and the buyers cannot ask a court to order a division.
• It needs a real element of chance. The buyers must all pay part of the price and have a similar life expectancy, or the purchase can be requalified as a gift.
• It does not avoid inheritance tax. The survivor pays according to their link with the deceased: nothing between spouses and PACS partners, 60% after an allowance of 1,594 euros between unmarried partners. On a main residence worth less than 76,000 euros, the survivor pays only the transfer duties of a sale.

For an unmarried couple, the clause secures the home and leaves the 60% bill intact. Marriage or a PACS removes the tax; the residence side is in our guide to PACS versus marriage for binational couples. With children from earlier relationships, ask the notaire how the clause sits with their reserved share, which the notaires.fr page does not address.

SCI, Tontine or Your Own Name: Which Is Simpler?

Buying in your own name is the simplest: no company to create, no company return, and the main-home allowances stay. Two people who buy together without a structure hold the property in indivision, each for a share that the Chambre des Notaires de Paris says should match what each one paid.

Source: Service-Public, indivision between heirs, Service Public Entreprendre, the SCI and Notaires de France, purchase with a tontine clause.

The indivision rules are those service-public gives for heirs (page checked on April 16, 2026).

A married couple buying a home to live in gains little from an SCI: the survivor is already exempt from inheritance tax, and the company costs the two main-home allowances. An SCI earns its paperwork when several relatives or friends want written rules, when parents intend to give shares over the years, or when one person should manage what several own.

How Does the IRS Treat a French SCI?

The IRS does not follow the French label: a foreign entity that is not on its list of automatic corporations is classified by default rules and can choose another classification on Form 8832. Which rule fits your SCI must be confirmed by a cross-border tax professional before the statuts are signed, because the IRS pages give rules, not a ruling on the SCI.

• The default. The instructions of Form 8832, Entity Classification Election (revision of December 2013) state that, unless an election is made, a foreign eligible entity is a partnership if it has two or more members and at least one does not have limited liability, and an association taxable as a corporation if all members have limited liability. A member has limited liability when they have no personal liability for the entity’s debts by reason of being a member.
• The corporation list. For France, the list of foreign entities always classified as corporations names one form, the Société Anonyme.
• Read with French law. An SCI has at least two associés whose liability service-public calls indefinite, so the two pages point to a partnership by default. That is a reading of general rules, not an IRS statement about the SCI.
• The election. A foreign entity with at least one owner without limited liability can elect to be classified as a corporation. The election cannot take effect more than 75 days before the form is filed or more than 12 months after, and the classification generally cannot be changed again by election for 60 months.

Source: IRS, Instructions for Form 8865, Instructions for Form 5471 and About Form 8858.

Each instruction gives a penalty of 10,000 dollars, per tax year of each foreign partnership for Form 8865 and per annual accounting period of each foreign corporation for Form 5471.

Compare direct ownership. On the IRS comparison of Form 8938 and FBAR requirements (reviewed on September 19, 2026), foreign real estate held directly is on neither form. Held through a foreign entity, the real estate is still not reported, but the entity itself is a specified foreign financial asset for Form 8938, which starts abroad above 200,000 dollars on the last day of the year or 300,000 dollars at any time (400,000 and 600,000 dollars on a joint return). The SCI’s bank account can also bring you into the FBAR, as our guide to FBAR, FATCA and the tax treaty explains.

What no official page read for this guide settles, and it therefore does not state: how the United States taxes your share of the SCI’s income in each classification, and how French tax paid through the SCI fits the foreign tax credit on Form 1116. The mismatch also runs the other way: see how France reads a US LLC.

Common Mistakes to Avoid

• Creating the SCI with French advice only. Nobody has checked what the IRS makes of it unless you asked a US adviser first.
• Expecting it to cut inheritance tax by itself. The shares are taxed, the reserve applies and the main-home allowances are lost.
• Treating it as a limited liability company. The associés answer for its debts without limit, in proportion to their shares.
• Renting furnished through it. Past 10% of turnover, the company moves to corporate tax, an option that can be revoked only until the fifth fiscal year.
• Selling shares on a private document. Since June 27, 2026, that sale is void for a company whose assets are mainly real estate.
• Adding a tontine clause to avoid tax. Unmarried partners still pay 60%, and neither can force a sale.

Practical Checklist

• Write down why you want a structure: buying with others, giving to children, protecting a partner. If none applies, price the purchase in your own name first.
• Ask a US cross-border tax adviser how the SCI would be classified and which of Forms 8832, 8865, 5471, 8858 and 8938 you would file.
• Ask the notaire to compare indivision, an SCI and a tontine clause, and an accountant to compare income tax and corporate tax, before the statuts are signed.
• Budget 60.38 euros, 19.33 euros and 191 euros before tax (mainland France, 2026), plus the drafting fee.
• Each year: file form 2072 by the second business day after May 1 unless dispensed, report your share in France, and file the US forms.

When to Get Help

An SCI is cheap to create and hard to undo: the corporate tax option becomes irrevocable and a US election is locked for 60 months. Three professionals have a part in it: a notaire for the deed, the statuts and the family law, a French accountant for the tax regime, and a US cross-border tax adviser for the classification and the forms. Our guide to finding English-speaking notaires, lawyers and accountants in France explains how to choose them. Before you pay any of them, a 30-minute consulting call helps you set out your situation and the questions to put to each one, so that the French and US sides are examined together. For a larger estate, read our guides to wealth planning before a move to France and to what a US living trust costs under French rules.

FAQ

Does an SCI avoid French inheritance tax?

No. The shares pass to your heirs and are taxed as the property would be, and the share reserved for your children applies to them. What the SCI allows is giving shares in stages within the allowance of 100,000 euros per child every 15 years, and splitting usufruct from bare ownership.

Can a non-resident own shares in a French SCI?

The official pages on the SCI set no residence or nationality condition for the associés, and service-public states that for a non-European who does not live in France no visa and no residence permit is required to create a company there (page checked on June 1, 2026). Running a company effectively and habitually from France does require an appropriate residence permit. A non-resident associé is taxed in France on their share of the rents, and the shares give no right to stay: a purchase at any price does not grant a residence permit.

Is a French SCI a corporation or a partnership for US tax purposes?

The IRS has no page on the SCI. Under the Form 8832 instructions, a foreign entity with two or more members, at least one of whom does not have limited liability, is a partnership by default, and the only French form always treated as a corporation is the Société Anonyme. The associés of an SCI have unlimited liability, so the default points to a partnership unless the entity elects otherwise. Have a cross-border tax professional confirm it.

Is a tontine legal in France?

The tontine clause in a property deed is an arrangement described by Notaires de France, on condition of a real element of chance: all the buyers pay part of the price and have a similar life expectancy. Savings circles also called tontines are a different subject, not covered here.

Do you need a notaire to create an SCI?

Not always. The associés can write the statuts themselves, and service-public gives 1,000 to 2,500 euros as the cost of a professional. A notaire is mandatory when real estate is contributed to the capital.

Conclusion

An SCI is a small French company that owns your property for you: at least two associés, about 270 euros of regulated costs before tax in 2026, and unlimited liability. It answers precise needs (written rules between several buyers, gifts to children over time) and leaves the rest untouched: the shares stay inside French inheritance tax, forced heirship and the wealth tax, and the home loses its two main-residence allowances. The tontine clause keeps the home for the survivor, with the tax unchanged. For an American the deciding factor often sits in the United States, where the SCI brings Forms 8832, 8865 or 5471 and 8938 into play while a property in your own name appears on neither the FBAR nor Form 8938. Settle the US classification, the French tax regime and the family rules before the statuts are signed.