In summary…
A non-resident SCI (société civile immobilière) or one held by a non-resident is taxed in two ways: under income tax (IR), the partner is taxed on their share of the rents with a minimum tax rate, unless they opt for the average rate, plus 17.2 % of social security contributions; under corporation tax (IS), the SCI pays 15 % or 25 % and the distribution is also subject to withholding tax, without social security contributions.
Our position: the choice is based on the holding period, not the stated rate. Upon exit, income tax retains the holding period allowances that corporate tax eliminates.
«My notary told me to switch my SCI (real estate company) to corporate income tax (IS) since I left; it’s simpler for a non-resident.» Simpler, no doubt; more economical, that depends on when you sell. Our article on taxation of foreign partners in a French real estate investment company (SCI) lays out the principles, and the one on the choice between IR and IS This applies to residents; this one compares the arbitration for a non-resident, rents and exit.
1. SCI taxed under the personal income tax regime: non-residents are taxed on rental income, with a minimum tax rate
A minimum tax rate, unless the option for the average rate is chosen.
The SCI taxed under the French personal income tax regime is transparent: the non-resident partner declares their share of the rental income in France. Their tax is calculated according to the tax brackets, with a minimum tax rate specific to non-residents, the level of which is verified for the year in which the income is received. This minimum can be avoided by opting for the average rate, which consists of calculating the tax on all of their income from French and foreign sources, when this rate is more favorable (see the option for the average rate). In addition, there are social security contributions of 17.2 % on property income, or only the solidarity levy of 7.5 % if the partner is affiliated to a social security scheme in the EEA or Switzerland.
2. Real estate investment company (SCI) subject to corporate income tax: two tiers of taxation
The company's corporate income tax, then the withholding tax on the distribution
The SCI (Société Civile Immobilière) that has opted for corporate income tax pays corporate income tax: 25% of the standard rate, or 15% of the standard rate on the first €42,500 of profit if the company meets the conditions for the reduced rate (turnover of no more than €10 million, fully paid-up share capital, and at least 75% of the share capital held by individuals). The dividend paid to the non-resident partner is then subject to withholding tax, the rate of which depends on the partner's status (individual or company) and may be reduced by a tax treaty (see our article on withholding tax on dividends). A non-resident does not pay social security contributions on dividends.
Specifically. Regarding annual rental income, the differences between personal income tax (IR) and corporate income tax (IS) cannot be compared based solely on the stated tax rate. Under personal income tax, the minimum tax rate for non-residents and social security contributions are levied on the shareholder. Under corporate income tax, the company first pays its tax, and then the distribution is taxed at source, without social security contributions; profits reinvested without distribution are not subject to this second tax stage. The annual comparison is calculated on your file, using the tax rates for the year, any applicable contractual tax rate, and the amount actually distributed.
3. Exit: Capital gain and sale of shares
Income tax (IR) restores the tax allowance, corporate tax (IS) eliminates it.
In a French SCI (Société Civile Immobilière) taxed under the personal income tax regime (IR), the sale of the property or shares by a non-resident is subject to the tax provisions of Article 244 bis A: the capital gain for an individual is taxed at 19% of the % (amount in percent), plus 17.2% of the % in social security contributions, with allowances for holding period that exempt the gain from tax after 22 years and from social security contributions after 30 years (details are provided in our article on the sale of property in France by a non-resident). In a French SCI taxed under the corporate income tax regime (IS), the capital gain on the property is a profit of the company, taxed at the corporate income tax rate without any allowance for holding period, and then taxed again upon distribution through withholding tax; the sale of shares in a predominantly real estate company by a non-resident is subject to the tax provisions of Article 244 bis A.
| SCI subject to income tax | SCI subject to corporate income tax | |
|---|---|---|
| Rents for the year | Partner: scale with minimum rate, plus 17.2 % social security contributions | Company: 15 % or 25 %; partner: withholding tax on dividends, no social security contributions |
| Sale of the building | 19 % + 17.2 %, duration allowances, exemption after 22 and 30 years | Corporate income tax on the company's capital gain, without any reduction based on the duration of the tax, then withholding tax on the distribution |
| Sale of shares | Article 244 bis A levy for companies whose assets consist primarily of real estate | Same levy as in Article 244 bis A |
Worked example
Situation. A sole shareholder, a non-resident outside the EEA, owns a Lyon-based SCI (real estate company) whose property was purchased for €400,000 in 2012 and sold for €600,000 in 2028, representing a 16-year ownership period. The capital gain, after standard deductions, is assumed to be €110,000 under both tax regimes for comparison purposes.
Issue. Does corporate tax (IS) carry more weight than personal income tax (IR) at the time of sale?
Strategy. Apply the rules of each regime to the same capital gain.
Result. SCI taxed under the personal income tax regime: €7,106 in tax plus €15,486 in social security contributions, i.e. €22,592, €87,408 net. SCI subject to corporate income tax: 25% corporate income tax (%) = €27,500, This amounts to €4,908 more than the income tax, before any taxation of the distribution of the remaining €82,500, which is also subject to withholding tax. The difference at the end of the transaction is therefore at least €4,908 to the detriment of the corporate tax.
Hypotheses. Capital gain of €110,000 (€200,000 gross capital gain, less the flat-rate allowances of 7.5 % and 15 %); allowances of 6 % per year (66 %) for tax and 1.65 % per year (18.15 %) for social security contributions, i.e. 11 years beyond the fifth; capital gain subject to income tax less than €50,000, therefore no tax on high capital gains; standard corporate tax rate of 25 %; capital gain of €110,000 assumed to be the same in both regimes, without reversal of depreciation; no more favorable agreement; not affiliated with an EEA or Swiss regime. Illustrative example, calculated using the rules in force on 23/10/2026.
For the technician. Corporate income tax option for civil law companies, corporate income tax rates (service-public.fr, fact sheet F23575), withholding tax on dividends paid to a non-resident, minimum tax rate and option for the average non-resident tax rate: provisions of the French General Tax Code (CGI) relating to non-residents, to be reviewed for the year in question. Capital gains tax: Article 244 bis A of the CGI, including for shares in companies whose assets consist primarily of real estate (notice 2048-IMM, 2026 edition); solidarity levy: Article 235 ter of the CGI. The 2026 Finance Law (Law No. 2026-103 of February 19, 2026, Article 7) establishes a tax on assets not used in the operational activities of holding companies (Constitutional Council Decision No. 2026-901 DC of February 19, 2026). Its application to a SCI subject to corporation tax must be verified on the text and is not decided here.
Our position
Decide on the holding period before opting
A French real estate investment company (SCI) that holds a property for a long time benefits from the personal income tax (IR) regime, because tax allowances eventually exempt the sale from taxation (after 22 years for income tax, 30 years for social security contributions). For a medium-term sale, the advantage of the personal income tax regime upon exit is reduced, and the calculation must be recalculated. Corporate income tax (IS) is suitable for companies that reinvest their profits and do not distribute them, or that depreciate the assets. These are three different situations, not a reflex to apply as soon as one leaves France. Once exercised, the option for corporate income tax cannot be easily revoked.
Frequently asked questions
Is a SCI (real estate investment company) owned by a non-resident more advantageous under the IR (personal income tax) or IS (corporate income tax) regimes?
This depends on the holding period: corporate income tax adds a withholding tax on the distribution and eliminates the time allowances on exit; personal income tax retains these allowances on the exit capital gain, but subjects the partner to the minimum rate for non-residents and to social security contributions on rents.
Is a non-resident subject to a minimum tax rate on their rental income?
Yes: their tax is calculated according to the tax brackets with a minimum rate, unless they opt for the average rate when it is more advantageous. Social security contributions are added to the rate of 17.2% (%), or to the solidarity levy of 7.5% (%) alone for those affiliated with a scheme in the EEA or Switzerland. The minimum rate applies to the year in which the income is received.
Is the sale of shares in a French SCI (Société Civile Immobilière) taxed in France for a non-resident?
Yes for shares in companies with predominantly real estate assets: they are subject to the levy of article 244 bis A, at a rate of 19 % for a natural person.
Are you a non-resident, a partner in a SCI (French real estate investment company) or about to create one?
The first meeting is used to compare IR and IS over your holding period, rents and exit, before any option is chosen.
Are you a notary, lawyer, or chartered accountant? And a non-resident client is hesitating between IR and IS for their SCI? We intervene in a joint venture on the comparative calculation: the client remains yours.
Book an appointment
The initial consultation is to establish your exact situation and determine if there is anything that can be done—sometimes there is nothing, and we will say so as well. Thirty minutes, with no obligation.
Book an exchange with Balmont Conseil
Alexis Sagnier, financial and real estate investment advisor, insurance broker, AMF certified. ORIAS 13003497. Updated on 23/10/2026.
Official sources consulted
- Minimum tax rate for non-residents (economie.gouv.fr)
- INR press kit, 2025 income (impots.gouv.fr)
- Corporate tax rates (service-public.fr entreprendre)
- Social security contributions for non-residents (service-public.fr, F2329)
- Notice 2048-IMM (2026 edition)
- Capital gains on real estate (service-public.fr, F10864)
- Constitutional Council, decision no. 2026-901 DC of February 19, 2026 (finance law for 2026)
