SCPI: optimize taxation for attractive real estate income

“When you have rental assets, it’s 17.2% social security contributions, plus the TMI at 11, 30, 41 or 45%”underlines Stephan Besnainou, commercial director at Aroxys. Concretely, a taxpayer in a 41% bracket pays 58.2% tax and social security contributions on each euro of SCPI income. And 62.2% in tranche at 45% Not counting the IFI potential for assets above 1.3 million euros. “So we can go up to 70% for the richest who are at the IFI “.

Playing on the geography of SCPIs

The first reflex to know when you want to lower your SCPI taxes is to turn to SCPI invested outside France. When an SCPI owns buildings abroad (generally Germany, the Netherlands, Spain, Italy, Ireland, etc.), the rents are first taxed in the country of the property, generally at a lower rate than in France. “ In Germany it is 15% deductionsin the Netherlands as in the majority of Europe, it’s around 25%, in Italy it’s 30% We’re going to play on that”confirms Stephan Besnainou. The 1959 France-Germany tax treaty, for example, sets the German withholding tax at 15.825%.

The other big asset: French social security contributions of 17.2% do not apply to foreign source incomein application of the “de Ruyter” judgment of the Court of Justice of the European Union. According to the tax convention, two methods are used by the French tax authorities to eliminate double taxation: the effective rate method (exemption with progressivity reserve) for Germany and the United Kingdom, or the tax credit method for Spain, Italy and the Netherlands. In all cases, the investor comes out a winner: the overall taxation of a 100% European SCPI is often around 20 to 30%.

Dismemberment, the flexible tool to prepare for retirement

The second lever is particularly suitable for highly taxed taxpayers: SCPIs in dismemberment. The principle is simple. You buy bare ownership of the shares at a discounted price of 20 to 40% compared to the full ownership price, and you waive the rent for the duration of the dismemberment. The usufruct, which gives right to income, is transferred to another investor (often an institutional one). During the entire period, you do not receive any rent…so you pay no income tax, no social security contributions, and the value of the shares is excluded from your IFI base. At the end of the dismemberment, you regain full ownership of the shares at 100%.

For Stephan Besnainou, this case is particularly interesting for those who want to prepare for their retirement, but who do not have no need for additional income immediately. “A 55-year-old investor, who has 8 years left before retirement, will buy his shares at 70% of their value. In 8 years, it recovers a value of 100 plus the rents. He buys less today the right to receive income later. » The dismemberment can be calibrated between 3 and 20 years depending on the contracts. The longer the duration, the greater the purchase discount, which mechanically increases the future gain.

Life insurance, to accommodate SCPIs in a tax envelope

The third option is to place your SCPI shares in life insurance. This is possible with most online insurers, who offer a selection of eligible SCPIs. “Having SCPI via life insurance is mainly used to create value in the tax envelope »believes Stephan Besnainou, “and to simplify transmission”. The major advantage is that rents are no longer taxed as property income, but capitalized directly in the contract. As long as you do not make a withdrawal, no taxes apply.

After 8 years of holding the contract, redemptions benefit from an annual reduction of 4,600 euros for a single person and 9,200 euros for a couple on capital gains. Beyond that, taxation drops to 7.5% (in addition to social security contributions) for the first 150,000 euros paid.