Family SARL or SCI in 2026: decision guide

Quick answer. The SCI taxed at personal income tax (IR) remains the reference vehicle for holding and transferring a bare-rental real estate portfolio, with a EUR 100,000 allowance per parent and per child renewable every 15 years. The Family SARL, governed by article 239 bis AA of the French Tax Code (FTC), is the only vehicle combining pass-through taxation (IR/industrial profits) with furnished rental under the actual-cost regime including building depreciation — but only within direct and collateral kinship up to the second degree.

The 2026 Finance Act (Act no. 2025-1680 of 14 February 2026) did not amend the core regimes of the Family SARL or the SCI, but four recent developments are reshaping the decision:

1. The increase in social contributions on capital income (CSG raised to 10.6%, total rate of 18.6%) does not apply to bare-rental property income (still 17.2%) but does apply to furnished rental business profits (BIC) and to the share of profits taxed at the partners of a Family SARL.
2. The refocus of the Dutreil pact (FTC article 787 B) under the 2025-2026 Finance Acts: individual holding commitment raised from 4 to 6 years, exclusion of luxury non-operating assets, strengthened review of the operational activity test.
3. The stabilisation of the LMNP (non-professional furnished landlord) regime after the 2025 Finance Act (reintegration of depreciation into the cost basis for individuals' capital gains), which does not apply when the activity is carried out through a Family SARL taxed at IR.
4. The tightening of the "Gérer Mes Biens Immobiliers" (GMBI) reporting framework, which encourages families to formalise legal structures to manage multi-property declarations. See our 2026 GMBI real estate declaration guide.

At Hayot Expertise, we have advised more than forty entrepreneurial families on this arbitration in 2025 and early 2026. The decision rule is never binary: it depends on four criteria detailed below.

A Family SARL is a standard limited liability company (French Commercial Code, art. L. 223-1 et seq.) that exercises a specific tax option: the partnership taxation election under article 239 bis AA FTC. The election removes the entity from corporate tax (IS) and channels profits directly to the partners' personal income tax, in the appropriate category (industrial profits BIC for commercial activity, agricultural profits BA for farming).

The election is reserved for SARLs whose partners are exclusively direct or collateral relatives up to the second degree, spouses or registered civil partners (PACS). Liberal professions (BNC) are explicitly excluded by article 239 bis AA. The election requires unanimous partner consent and lapses automatically as soon as a partner outside the eligible scope joins. Reference doctrine is consolidated in BOFiP BOI-IS-CHAMP-20-20-10.

Operational characteristics 2026

• Form: SARL (free capital, single or collective management).
• Activity: commercial, industrial, craft or agricultural — furnished rental qualifies because the FTC treats it as a commercial activity by nature (art. 35-I-5° bis).
• Liability: limited to capital contributions.
• Taxation: IR under the BIC regime (simplified or normal).
• Accounting: full commercial accounting, 2031-BIC tax return, registry filing.

The SCI is a civil-law company under articles 1832 et seq. and 1845 of the French Civil Code. Its corporate purpose must remain civil: managing a real estate portfolio, bare leasing, holding equity stakes. By default the SCI falls under the partnership regime (FTC article 8): partners are taxed pro rata, either as real estate income (bare rental) or as industrial profits (BIC) for any accessory commercial activity.

FTC article 206 triggers automatic corporate tax (IS) liability whenever the civil company carries out a commercial activity on a habitual basis. BOFiP doctrine BOI-IS-CHAMP-10-30 nevertheless tolerates accessory commercial activity — typically furnished rental — as long as it represents less than 10% of total revenue before tax, assessed as a rolling average over four consecutive fiscal years.

Operational characteristics 2026

• Form: civil company (flexible articles, light governance).
• Activity: bare rental, patrimonial management, dismemberment.
• Liability: unlimited and pro-rata to shareholding.
• Taxation: IR (real estate income) by default; IS election available and irrevocable after five fiscal years (FTC art. 239).
• Accounting: simplified at IR (cash-basis ledger), full commercial at IS.

Side-by-side comparison at IR#

When does the IS election make sense?#

Both vehicles can elect the corporate income tax (FTC article 206). The election radically changes taxation:

• Reduced IS rate of 15% up to EUR 42,500 (raised to EUR 100,000 by the 2026 Finance Act for independent SMEs only: turnover under EUR 10m, fully paid-up capital held 75% by individuals).
• Standard rate 25% above.
• Building depreciation fully deductible.
• Capital gain computed on net book value: the taxable base balloons after several years of depreciation.
• Dividend distributions taxed at the 30% flat tax (12.8% IR + 17.2% social contributions) or, at election, progressive bands.

The IS election is irrevocable after five fiscal years since the 2018 Finance Act (FTC article 239), making the decision particularly heavy. For a deeper dive, see our full analysis on the SCI IS or IR comparison: a structuring tax choice.

This is the procedure we follow at Hayot Expertise during every patrimonial consultation.

1. Identify the actual planned activity. Strict bare rental: SCI is the obvious answer. Furnished rental as principal activity: Family SARL at IR is the only vehicle combining transparency and depreciation. Mixed leasing (50/50 or more furnished than bare): Family SARL is mandatory to remain on IR without requalification risk.
2. Map the family perimeter. If all future partners are direct or collateral relatives up to the second degree, spouses or PACS partners, the Family SARL is open. Otherwise (uncles, cousins, non-pacsed partners, friends), only the SCI works.
3. Quantify the transfer horizon. Transfer within 15 years through multiple donation waves: dismembered SCI maximises the renewable EUR 100,000 allowance per parent and per child (FTC art. 779 and 790 G). Immediate transfer of an operating business: Family SARL with Dutreil pact under article 787 B.
4. Simulate the sale at 10 and 20 years. Compute theoretical capital gain under both regimes (individual vs corporate) and compare to the annual tax saving from depreciation. This simulation drives the final decision.

Family SARL management#

• Majority manager (holding alone or with close family more than 50% of shares): self-employed regime (TNS). Contributions around 45% of net pay and share of profit. Minimum annual contributions around EUR 1,200 (basic pension, sick pay, disability-death).
• Minority or equal-share manager, paid: general employee-like regime, with employer and employee contributions around 80% of net pay, with better health and pension coverage.
• Share of profit received by a non-managing partner: subject to 18.6% social contributions on BIC and to TNS contributions where the partner is actually active in the business (Social Security Code art. L. 131-6).

SCI management#

• Unpaid manager: no social contributions due. This is the standard configuration in family wealth planning.
• Paid manager: TNS regime if majority, employee-like regime if minority — but this is uncommon in a pure patrimonial SCI.
• Partners: no direct social contributions on real estate income, which bears only the 17.2% social contributions (not 18.6%: real estate income was excluded from the 2026 Social Security Act CSG increase).

Concrete figure: a manager receiving EUR 60,000 of profit share through a Family SARL (majority manager) will bear around EUR 27,000 of TNS contributions, whereas the same amount received as real estate income through an SCI will bear only EUR 10,320 of social contributions. The gap is material and must enter the profitability calculation.

The Dutreil pact (FTC article 787 B): a Family SARL asset#

The Dutreil pact provides a 75% exemption on transferred value (donation or inheritance) in exchange for holding commitments and a management function. The 2025-2026 Finance Acts have refocused the regime:

• Collective commitment: at least 2 years between signing shareholders.
• Individual commitment: raised from 4 to 6 years by the 2025 Finance Act, i.e. 8 years total lock-up.
• Management function exercised throughout the collective commitment and for 3 years after the transfer.
• Exclusion since 2026 of luxury non-operating assets (yachts, luxury cars, leisure properties).
• Eligible activity: industrial, commercial, craft, agricultural or liberal — which excludes the purely civil SCI but includes a Family SARL carrying out a real commercial activity (including furnished rental if it amounts to a genuine business).

The reference doctrine is consolidated in BOFiP BOI-ENR-DMTG-10-20-40-10 (updated 30 May 2024, pending a rewrite to integrate the 2025-2026 Finance Acts).

Share donation in an SCI: the renewable allowance mechanism#

The SCI allows progressive wealth transfer through successive share donations:

• Allowance of EUR 100,000 per parent and per child every 15 years (FTC art. 779 I and 790 G).
• Discount of 10% to 20% on share value for illiquidity (consistent case law: Cass. com. 6 October 2009 no. 08-15.054 and 25 March 2014 no. 12-29.534).
• Dismemberment: donation of bare ownership, with parents retaining usufruct, income and management control. The bare-ownership value is computed under the statutory schedule (FTC art. 669), significantly reducing the taxable base depending on the donor's age.

A 60-year-old couple dismembering EUR 600,000 of SCI shares to two children can transfer the bare ownership in full by using twice the EUR 100,000 allowance, after a 15% discount and the usufruct/bare-ownership ratio (60% bare ownership at 61-70 years old) — an almost tax-free transfer spread over 15 years.

For deeper coverage of capital gains arbitrages, see our note on French capital gain exemptions on transfer.

Holding short-stay rentals through a Family SARL#

The Family SARL at IR has become the structural solution for short-stay rentals after the 2025 Finance Act. As a reminder, that Act lowered the unclassified furnished micro-BIC threshold to EUR 15,000 and the abatement to 30%, and reintegrated depreciation into the cost basis for individuals' LMNP capital gains. That reintegration does not apply when the activity is carried out through a Family SARL at IR. Read our deep dive on LMNP 2026: new rules after the 2025 Finance Act.

SCI at IS to depreciate a business property#

Where the SCI holds a building leased to an operating company (classic OBO structure) with a remote or absent sale horizon, the IS election may be considered to depreciate the asset and limit current taxable base. The trade-off: heavy taxation on resale. To be reserved for configurations without a sale plan.

Unmarried partners or partners not in a PACS#

The Family SARL is closed to cohabiting partners. Only the SCI allows joint ownership with a protective statutory framework (articles, shareholder pact, approval clause).

Cross-dismemberment and family SCI#

Cross-dismemberment between spouses through an SCI transfers wealth to the survivor while avoiding inheritance tax on half the property. The strategy requires notarial deed and specific statutory drafting.

• Mismapped family perimeter: the arrival of an uncle, cousin or brother-in-law (not spouse and not PACS) automatically terminates the 239 bis AA election and reverts to IS. Check composition at every new partner entry.
• Automatic SCI reclassification to IS: exceeding the 10% commercial-revenue threshold over more than one four-year cycle triggers IS by operation of law (FTC art. 206), without possible rollback. Track furnished vs bare revenue annually.
• IS election taken without resale simulation: depreciation provides immediate gains but dramatically worsens the capital gain on sale. Always simulate at 10 and 20 years.
• LMNP capital gain through a Family SARL at IR: do not confuse with personal LMNP. Tax-claimed depreciation is not added back to the cost basis (individual regime maintained — FTC art. 150 U).
• Mismanaged Dutreil pact: forgetting the management function during the collective commitment or the three following years triggers retroactive loss of the exemption. Document the function through minutes.
• Standard SCI templates downloaded online: insufficient to drive complex transfers (approval clauses, dismemberment, governance, distribution). Have the articles drafted by a professional.

Recently, a Paris-region executive couple asked us to structure four real estate assets (two bare, two short-stay rentals) ahead of a transfer to their three children within ten years. The default reflex — a single family SCI — would have triggered automatic IS reclassification within three years because of the weight of short-stay rentals (35% of revenue). We recommended a two-tier structure: an SCI at IR for the two bare assets (transfer through progressive dismemberment), and a Family SARL at IR for the two short-stay properties (BIC pass-through, depreciation, 22-year capital gain exemption). Estimated net saving over ten years: around EUR 180,000 between depreciation, social-contribution savings and optimised transfer duties.

The rule of thumb we apply in patrimonial work: SCI is the default for bare-property transfer; Family SARL becomes necessary as soon as furnished rental exceeds 10% of revenue or the portfolio includes an operating business eligible for the Dutreil pact. Any other configuration deserves a quantified simulation before deciding.

Hayot Expertise advice. Never decide this arbitration on current taxation alone. An annual EUR 3,000 depreciation gain can be wiped out by EUR 50,000 of additional capital gain on resale. Ask your chartered accountant for a comparative IR/IS simulation over two horizons (10 and 20 years), accounting for projected real estate inflation (1.5% to 2.5% per year depending on zone) and your personal tax bracket. That projection reveals the truly optimal vehicle.

• The SCI at IR remains the reference vehicle for holding and transferring a bare-rental real estate portfolio.
• The Family SARL (FTC art. 239 bis AA) is the only vehicle combining IR pass-through with furnished rental under the actual-cost regime, within direct and collateral kinship up to the second degree.
• The IS election is irrevocable after five fiscal years and heavy on resale: simulate at 10 and 20 years.
• The Dutreil pact (FTC art. 787 B) applies to operating Family SARLs, not to purely civil SCIs — individual commitment now 6 years since the 2025 Finance Act.
• The SCI enables progressive transfer through dismemberment and the EUR 100,000 allowance renewable every 15 years (FTC art. 779 and 790 G).
• The SCI is reclassified to IS by operation of law as soon as commercial revenue (furnished rental) exceeds 10% of total revenue over four consecutive fiscal years (BOFiP BOI-IS-CHAMP-10-30).