Real Estate Tax Accountant

You look for a real estate tax accountant when the issue is no longer just filing rental income correctly. The question is how to choose the right structure and tax regime so your net return survives over time. In practice, the same comparisons come back again and again: SCI under income tax or corporate tax, LMNP under the real regime or micro-BIC, real estate holding company, property VAT, resale capital-gains treatment, family transmission or a move toward a property-dealer model.

In real estate, a good tax decision cannot be judged only in the acquisition year. It affects the holding period, borrowing capacity, cash circulation between entities, tax on resale and the way the portfolio is transmitted. A specialist real-estate tax accountant therefore has to reason asset by asset and structure by structure, not only at the level of one annual return.

The aim is to help property investors, SCI shareholders, furnished-rental landlords, family holding structures and more active operators choose a tax path that remains coherent from acquisition to resale and from one generation to the next.

SCI under IR or SCI under IS

This is still the most common real-estate tax question, and it depends entirely on the project's horizon and economics.

SCI à l'IR (income tax) keeps fiscal transparency: each partner is taxed on their share of net property income at their marginal rate (up to 45% + 17.2% social charges). It allows the déficit foncier rule: losses from deductible works can offset other taxable income up to €10,700 per year. The property is not depreciable, but the capital gain on sale benefits from full IR exemption after 22 years and full social-charge exemption after 30 years.

SCI à l'IS (corporate tax) allows depreciation of the property (typically 25-30 years for the building, excluding land), full deduction of director compensation and a more favourable interest profile. IS rates are 15% on the first €42,500 of profit (SME), 25% beyond. But on sale, the capital gain is taxed as corporate profit (25%) without holding-period relief, making the IS option costly if a near-term sale is planned.

We model both regimes over a 5-10 year horizon, factoring in your marginal tax rate, planned works, expected rents, exit timing and family transmission plans.

LMNP, LMP and furnished rentals

LMNP (Loueur Meublé Non Professionnel) under the real regime can neutralise much of the tax burden through depreciation, but it requires clean accounting, a defensible depreciation schedule and a clear view of how the landlord's status may evolve if the portfolio grows.

Under LMNP at real regime, the building (excluding land, typically 15-20% of total value) is depreciated over 25-30 years, furniture over 5-10 years, and works over 10-15 years. The depreciation often reduces taxable rental profit to zero for 10-15 years.

Once rental income from furnished property exceeds €23,000 per year and 50% of household income, the LMP (professional) status applies automatically, with major implications: rental losses become deductible against global income, but the operator falls under URSSAF social contributions on profits, and the activity is included in the IFI base differently. We monitor this threshold for every client approaching the limit.

Property VAT and optional VAT on rents

In property matters, VAT mistakes can be expensive. Commercial-rent VAT options, VAT on margin (for marchands de biens), VAT on total sale price and para-hotel activity rules all need proper qualification and documentation before the deal is executed.

VAT on commercial rent: leases of commercial premises are by default exempt from VAT, but the lessor can elect VAT (the election cannot be withdrawn before 1 January of the ninth year following the year it was made), allowing recovery on acquisition/works costs (~20% saving). The election must be formally notified to the tax office and the tenant.

VAT on margin (marchands de biens): taxes only the difference between sale and purchase prices. Eligibility depends on the original acquisition (must not have given rise to VAT deduction), the nature of the asset and the scale of works. Misqualification triggers full-price VAT, which can erase the deal's margin.

Para-hotel VAT (10%) on furnished rentals: requires at least three of four services (breakfast, regular cleaning, linen, reception) and proper service-invoicing structure. The option allows VAT recovery on acquisition and works.

Property holding companies and family transmission

Once several assets, several shareholders or several generations are involved, the holding patrimoniale structure becomes relevant. It offers:

• Régime mère-fille: dividends from SCI subsidiaries subject to corporate tax flow to the holding at quasi-exemption (1.25% effective tax rate); an SCI under income tax pays no dividends, its share of profit being taxed directly at the holding.
• Cash mutualisation: cash from one SCI can finance acquisitions in another via current-account loans or capital injections, without exiting the holding's tax shelter.
• Transmission via share donation: with usufruct reservation, the donation tax base is reduced by 30-60% depending on the donor's age. Combined with the €100,000 per parent/per child allowance renewable every 15 years, this lever can pass a significant portfolio with minimal duties.
• Dutreil pact: under conditions, transmission of shares in an operating real-estate company (marchand de biens, hotellerie) can benefit from an exemption from gift and inheritance duties on 75% of their value.

1. Start from the actual project

We look at the asset type, use model, expected holding period, lenders, shareholders, income goals and exit scenario to understand whether the logic is rental yield, patrimonial holding, active development or family transmission.

2. Build comparative scenarios

Each scenario integrates current tax, depreciation, available cash, refinancing capacity, dividends, resale tax and the shareholders' personal position. This avoids tax choices that later damage flexibility or liquidity. The scenarios are quantified across a 5-10 year horizon.

3. Move into execution

We then help create or update the structure, organise the accounting setup, prepare the right returns (2072 for SCI à l'IR, 2065 for SCI à l'IS, 2031 for LMNP), secure tax options, document sensitive steps and coordinate with the notaire, lawyer or bank where needed.

1. Choosing SCI à l'IS purely for depreciation, without modelling the exit

The IS option is attractive during operating years (depreciation reduces current tax) but punitive on sale (25% IS on the gain with no relief). For a 7-10 year hold with planned exit, IR often wins.

2. Missing the LMP threshold

Crossing the €23,000 + 50% threshold without preparation can trigger URSSAF reassessment and a fundamentally different tax position. We monitor this for every active LMNP client.

3. Skipping the VAT option file

The VAT option on commercial rent must be in writing, formally notified, and kept in place until at least 1 January of the ninth year following the year it was made. Many investors recover VAT informally on works and find themselves reassessed.

4. Confusing investment SCI and marchand de biens

A real estate operator who flips properties may be requalified as a marchand de biens, losing capital-gains tax relief and triggering full BIC taxation plus VAT-on-margin obligations. Activity qualification must be set from the first deal.

5. Leaving the family transmission until too late

Donations with usufruct reservation are most powerful when the donor is young. Waiting reduces the discount. We build the transmission roadmap as part of the initial structuring.

Before acting, review acquisition method, price allocation, financing structure, fees, planned works, intended use, income qualification, shareholder agreement and exit strategy. Those choices directly shape both future accounting quality and the tax strength of the file. The right structure for a long-term rental property may not be the right one for a commercial property, a serviced residence, a family SCI or a quick resale project.

The first quarter delivers:

• a clear view of the relevant structures and the rationale for each;
• the immediate tax risks worth addressing (VAT option, LMP threshold, IFI exposure);
• the realistic options on IR, IS, VAT and holding design;
• the supporting documents or cleanups still required;
• a more readable link between tax choices and true net return;
• a roadmap that stays usable from acquisition to exit and from one generation to the next.

We combine accounting expertise with real-estate tax knowledge: SCI IR / IS arbitrage, LMNP real-regime depreciation, para-hotel VAT structuring, marchand-de-biens qualification, holding patrimoniale, Dutreil pact, and capital-gains optimisation. We work nationally with a digital model: same delivery quality, faster turnaround.

Free quote within 24 hours, first meeting on the house to review your portfolio, identify quick wins (VAT option, LMNP regime, IR vs IS arbitrage) and define a 12-24 month roadmap aligned with your patrimonial goals.

These positions are reviewed at every major transaction (acquisition, sale, refinancing, donation) and at the annual close, so the tax trajectory stays defensible across the holding period and the eventual exit. For investors with international exposure (cross-border SCIs, non-resident partners, foreign properties), we coordinate with the relevant tax treaty rules and ensure consistent treatment in France and the residence country.

The IFI (impôt sur la fortune immobilière) applies to households whose net real estate assets exceed €1.3m on 1 January, with a progressive scale from 0.5% to 1.5%. We work on four main levers:

1. Deductibility of debts actually taken out to acquire, keep or improve a taxable property. Interest-only (in fine) loans have been restated under a specific formula since 2018.
2. Split ownership: the bare owner is not taxed on the full value; the usufructuary is generally taxed on the full value, except in the legal cases where the value is split between them. The position has to be checked asset by asset.
3. Holding through an operating company: a property held by an active commercial company falls outside the IFI base when it is used for the activity (for example offices or warehouses used by the owner's SME).
4. Business-asset exemption for furnished letting (Article 975 of the French Tax Code): furnished premises can be exempt when the household earns more than €23,000 a year in receipts from the activity and derives more than 50% of its professional income from it, provided the activity is profitable. The Dutreil pact, often wrongly cited here, does not reduce IFI: it concerns gift and inheritance duties.

The real difference in tax between these three regimes can reach €200k to €500k on a property bought for €600k and sold for €1m after 15 years. It is the most structuring decision at the time of acquisition, and the hardest to correct afterwards.

Property development and off-plan sales (VEFA). For construction or heavy refurbishment operations intended for resale, the tax and accounting treatment follows specific rules: an operation account per programme, the treatment of deductible VAT on works, and monthly follow-up in coordination with the developer, the notaire and the sales agents. We regularly support small and medium-sized operations (5 to 50 units).

Withholding at source and instalments. Property income and LMNP furnished-letting profits are subject to monthly or quarterly instalments collected by the tax authority (DGFiP). The right settings avoid unnecessary cash outflows and allow an immediate adjustment when income falls (rental vacancy, works). We review this modulation every year with our clients.

If you live abroad and hold property in France, your tax treatment is not decided by French rules alone. It depends on the bilateral tax treaty between France and your country of residence, and each treaty is different. The same applies in reverse, for a French resident owning property abroad. Getting this wrong on rental income, or on a resale capital gain (plus-value immobilière), is a common and costly mistake in cross-border files.

A departure from France can also trigger the exit tax (Article 167 bis of the French Tax Code) on latent gains on shares, where the taxpayer was French tax resident for at least six of the previous ten years and holds at least 50% of a company or shares worth more than €800,000. We handle these files with international tax lawyers, notably for owners moving between Europe, North America and the Maghreb.