Rock paper has been popular for several years. If SCPIs have many advantages to please, the taxation of this investment turns out to be a real headache. Focus.
Real estate investment companies (SCPI) are definitely still on the rise. After a record year in 2022, the net collection of 2023 is comparable to those of 2020 and 2016 and reached 5.7 billion eurosaccording to Aspim (French Associations of Real Estate Investment Companies).
It must be said that with an entry ticket sometimes accessible from a few hundred eurosand an average yield of 4.52% (net of fees) in 2023, SCPIs have no shortage of arguments to convince investors.
But be careful not to make mistakes that could cost you dear when declaring your winnings to the tax authorities. Because declaring your SCPI income is anything but fun.
Micro-land estate: 30% flat-rate reduction
Have you invested in stone and paper? In the eyes of the tax authorities, the dividends paid to you by SCPIs fall (for the most part) into the category of property income. In other words, your winnings are mostly subject to progressive bar and social security contributions.
You therefore have the choice between two tax regimes: the real dietand the micro-land. In 9 out of 10 cases, eligible taxpayers opt for micro-real estate. They thus benefit from a flat-rate reduction of 30% on gross revenues, explains Stphane van Huffel, co-founder of Netinvestment.
If you opt for the micro-land regime, indicate the total amount of your micro-land income in the box 4BE of form 2042. No need to deduct the allowance from 30%the tax administration will calculate it for you.
However, this diet is not accessible to everyone. To be eligible, your annual property income must not exceed the total sum of 15,000 eurosand part of this income must come from a Property held live.
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Real regime: profitable if your expenses are high
Micro-land ownership is not always the most attractive tax regime. If you buy SCPI credit shares, for example, there is a good chance that the amount of charges associated with your investment will be greater than 30% gross rents. In which case, it is better to opt for the real diet. This option is irrevocable for three years.
Micro-real estate is especially suitable for investors who buy SCPI shares for cash, confirms Stphane van Huffel. In contrast, the real diet allows you to deduct the entirety of the charges relating to your investment.
To simplify the reporting procedures, the management companies which oversee the SCPIs send you each year a Single tax print (IFU), in which they specify the exact amount of gross income and deductible expenses.
If you purchased SCPI shares on credit, your bank will also send you the annual statement of your loan interest. From this information, you can calculate your net property income and indicate the result obtained in the box 114 of form 2044.
If your net property income is greater than zero, you then simply enter this amount on the line 4BA of form 2042. However, it happens that after deducting charges, your net property income ends up in the red.
New this year: the limit for imputation of land deficits on overall income is temporary and under certain conditions raised from 10,700 euros to 21,400 euros per year. This new system only applies to energy renovation expenditure allowing a property of exit thermal sieve status. The taxpayer must prove acceptance of a quote from November 5, 2022 and paid between January 1, 2023 and December 31, 2025. If the land deficit is greater than this ceiling, the excess can be carried over to the income of the 10 following years.
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How to declare your earnings abroad?
More and more SCPI managers are investing beyond French borders. An openness to the world which often results in a more advantageous tax for French investors.
International income escapes social security contributions, underlines Stphane van Huffel. In addition, the applicable taxation is that of the country where the real estate is located, regardless of the place of residence of the subscriber.
In other words, rents from the rental of an office building located in Berlin will be subject to German taxation. And this, even if the property in question is held by an SCPI of French origin.
In order to avoid taxpayers being taxed twice, in the foreign country, then in France, the member states of the European Union have signed tax conventions. In detail, two devices have been planned.
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In Germany, Spain or the United Kingdom, for example, the taxpayer is taxable in France and in the country where the property is located. But in return he benefits from a tax credit which more or less neutralizes French taxation. In other countries, such as Belgium, Portugal and the Netherlands, your earnings are only taxed abroad. However, this income is taken into account to determine your tax rate.
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How to declare your financial income?
When you buy SCPI shares, the management company strives to invest your money as quickly as possible by acquiring new real estate. However, it happens that, due to lack of opportunities, several weeks pass before the manager purchases a property.
The management company can then decide to invest your cash on secure savings vehicles. THE financial income thus generated must also be the subject of a declaration to the Public Treasury, via the form 2042.
The applicable taxation is the same as for property income. It is therefore the progressive scale of income tax which prevails. However, since 2018, you can also under certain conditions opt for the single flat-rate direct debit (PFU), i.e. 12.8% tax and 17.2% social deductions, specifies Stphane van Huffel.
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How to declare your capital gains?
Finally, in the event of a capital gain upon the resale of your SCPI shares, your gains are subject to income tax (19%), as well as social security contributions (17.2%). Or a total tax of 36.2%.
However, partners benefit from tax reductions, the amount of which varies depending on the length of ownership. The amount of these reductions is not the same for income tax as for social security contributions. Note that the higher capital gains 50,000 euros have been subject to a specific tax since January 1, 2013.
| Duration of holding SCPI shares | Amount of income tax deduction | Amount of the reduction for social security contributions |
|---|---|---|
| 0 – 5 years | 0% | 0% |
| 6 – 21 years old | 6% | 1.65% |
| 22 years old | 4% | 1.60% |
| 22 – 30 years old | Exemption | 9% |
| Beyond 30 years | Exemption | Exemption |
Result: if you have held your SCPI shares for over 22 years old, your capital gains are no longer subject to income tax. To also be exempt from social security contributions, you must wait 30 years.
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