There are two kinds of real estate investment companies (SCPI): those called “yield” and those called “fiscal”. If the latter numbered 100 at the end of 2021, out of 210 SCPIs in total, their weight in the outstanding amount of this investment remains low – 4.6% of the funds invested, according to the French Association of Real Estate Investments (Aspim).
The reason ? This is a niche investment, essentially distributed by the major banking and insurance networks to customers eager for tax-free investments. Unlike performance SCPIs, which are diversified and buy mainly tertiary assets (offices, shops, etc.), these SCPIs invest exclusively in residential real estate. And they undertake to rent their assets for a given period while respecting the conditions of the tax measures they are targeting. Because their goal is to offer their subscribers a deduction or a tax reduction, as if they owned a property directly.
There are thus Pinel SCPIs (which acquire new buildings), Denormandie SCPIs (which buy old buildings in poor condition and restore them), Malraux SCPIs (which invest in quality old buildings in protected neighborhoods and renovating it), land-deficit SCPIs (which rely on the rehabilitation of the old degraded condition) and historic monument SCPIs (which focus on listed buildings).
Profit to the first subscriber
Before placing your savings there, be aware that these tax SCPIs have virtually no liquidity. To benefit from the tax reduction, you must indeed keep your shares for a certain number of years until the end of the commitment of the tax system. If you want to resell before, you will have the greatest difficulty in finding a buyer, unless you grant him a very significant price discount. Because the tax reduction, which boosts the yield of these investments, only benefits the first subscriber. The tax authorities will also ask you to repay the tax benefit, which will destroy all the interest of your investment.
And even if you keep your SCPI until their term, you will not recover your capital immediately. Indeed, at the end of the tax system, they “self-dissolve” and resell all of their real estate, which can take two to three years. They then reimburse their unitholders with the funds recovered. Second black point of this investment: depending on the case, you can generally expect between 1% and 2.5% gross return, before tax benefit, or two to five times less than the SCPI return.
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