Joint Ownership and SCI
Buying, holding or inheriting a property with others always raises the same question: unstructured joint ownership (indivision) or an organized société civile immobilière (SCI, the French property holding company)? This guide covers both regimes: the decision-making rules of joint ownership, the ways out of it, selling without everyone's consent, setting up an SCI, an honest comparison of the two formulas, family transmission through gifts of shares, and taxation under income tax or corporate tax, every answer being grounded in the legislation in force.
All questions
Indivision is the situation in which several people own the same property together, each holding a share. Any co-owner may carry out acts of preservation alone (Article 815-2 of the French Civil Code), acts of administration require a two-thirds majority of the undivided rights (Article 815-3), and selling the building requires unanimity.
No one may be forced to remain in joint ownership: Article 815 of the French Civil Code lets any co-owner demand the division (partage) at any time. Four routes exist: an amicable sale of the property, the sale of your undivided share, an amicable division before a notary or, in case of deadlock, a court-ordered partition with an auction sale.
Yes, in two cases. Article 815-5 of the French Civil Code allows a court authorization where a co-owner's refusal endangers the common interest. Article 815-5-1 allows the holders of at least two thirds of the undivided rights to have the sale authorized by the judicial court, after service through a notary; the sale then takes place by auction.
Setting up an SCI requires at least two partners, written articles of association (Articles 1832 and 1835 of the French Civil Code), freely determined capital, the appointment of a manager, publication of a legal notice, then registration with the Trade and Companies Register via the INPI single portal: the company only acquires legal personality upon registration (Article 1842).
Joint ownership is simple and free but unstable: any co-owner may demand the division at any time (Article 815 of the French Civil Code) and selling requires unanimity. An SCI costs money to create and run, but its articles durably organize decisions, exits and transmission. The right choice depends on the project's duration and purpose.
A family SCI allows a progressive transmission: each parent may give each child 100,000 € worth of shares free of gift tax (Article 779 of the French General Tax Code), an allowance that resets every fifteen years (Article 784). Gifting only the bare ownership of the shares, valued under the scale of Article 669, further reduces the tax cost.
By default, an SCI is tax-transparent: each partner is taxed personally on their share of the rental income (Article 8 of the French General Tax Code) and enjoys the individuals' capital gains regime on resale. Under the option of Articles 206, 3 and 239, the SCI moves to corporate tax: depreciation allowed, but resale and distributions heavily taxed.
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