SCPI: TAXATION, INDUCED COSTS AND RISKS

SCPI: TAXATION, INDUCED COSTS AND RISKS

Currently star of investment solutions, the SCPI makes it possible to invest in real estate without bearing the constraints, and probably reports as much security.

If we are not too far from the truth, it is advisable, however, to qualify the statement, because behind the fiscal opportunity that represents the Civil Society Real Estate Investment, it must be remembered that there is still a related tax for the  associates of SCPI , as well as costs, fees and other risks induced by this investment.

This is what we propose to explain to you today, in our legal and fiscal point!

The tax regime of the SCPI: so simple as that?

By buying  SCPI shares  , investors become  partners  in the said Real Estate Investment Firm. Who says partner says receipt of dividends.

However, the SCPI benefits from the principle of  semi-fiscal transparency  (within the meaning of Article 8 of the General Tax Code). This means that the profits realized by the SCPI are taxed in the personal name of the partners, according to the result made by the SCPI, and according to the fraction of the rights owned by the partners (in other words, their number of shares). .

For natural persons, the income of the SCPI is taxed at four levels:

  • The rents collected  are taxed according to the progressive rate of income tax, in the category of property income (not being financial, they are excluded from the flat-tax), to the extent of the share of result they affected according to the rights acquired within the SCPI. They therefore obey the following scale for the year 2018:
  • In case of transfer, it will be necessary to see if it is about  capital losses  or  capital gains . For the latter, in the case of capital gains on the sale of securities, this will be subject to the progressive income tax schedule (+ 17.2% of social security contributions). For capital gains from the sale of shares of the SCPI, or sale of buildings of the SCPI, this will fall under the regime of capital gains real estate. Taxation is then at a proportional rate of 19%, plus 17.2% of social security contributions.

It is therefore important to have this information in mind in order to better prepare the tax future of its investment in SCPI. However, the miscalculation of some people is to think that the taxation of SCPI is done on existing income. However, it is actually a tax on nonexistentincome  until then , that you create through your investment. The taxed income is new, and you perceive of course a residue.

Are there any fees to pay?

Yes, because there are actually costs related to the investment, such as the subscription fees to the management company, which vary depending on the company, and are generally between 5 and 12% of the amount subscribed. They constitute an entry fee, payable at one time upon acquisition. There is also an annual management fee, which generally corresponds to 10% excluding tax of rent collected. But the practice is that the investor, to the perception of his rents, does not undergo this cost: it is therefore quite painless for him.

In case of recourse to a sale of shares of closed-end SCPI through a “secondary market” of closed-end SCPIs, a  transfer commission will be borne by the buyer . This is also accompanied  by registration fees. It should be noted that this commission is paid only at the exit, which suggests that a SCPI manager has such confidence in the evolution of his vehicle, that he prefers to favor a commission on an unknown exit price ( but presumably on the rise), a commission on a fixed entry price.

There is no “secondary market” for variable capitalized REITs. However, any withdrawal request made known to the management company must be offset by a new subscription: therefore, the  management company must determine a withdrawal price .

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