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Family SCI and property rental

Posted by FindHomeAbroad on July 18, 2022

Family SCI and rental of real estate
What is a rental family SCI?

We talk about rental family SCI when the company owns rented property and therefore generates rental income. In the event of dismemberment, it is the partner holding the usufruct of a share who receives the income.

SCI family rental and bank mortgage
When the rental property is financed via a bank mortgage, the objective is often to get as close as possible to the neutral operation. In other words, the property income generated in one month must cover the mortgage repayment.

Getting a French mortgage via a family SCI offers several advantages to the shareholders:

This helps to smooth everyone’s debt capacity. A borrower with a low loan-to-value ratio can therefore access higher financing than on an individual basis.
The loan reduces the valuation of the property which serves as the basis for calculating inheritance and gift costs;
Mortgage interest can be deducted from taxable rents;

The family SCI can borrow without contribution if the property is intended to be rented out.

💡 Which bank to choose for a family SCI loan? Most traditional banks lend to family SCIs. In the event of a rental, we recommend that you favour responsive banking establishments and competent contacts. Indeed, the rate that will be tax deducted is not a size criterion.

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