Buying french property through a company: guide & tax benefits

• The problem: SCI, SARL, SAS, a foreign holding company — the options all get grouped together as “buying through a company,” but they carry genuinely different rules on liability, taxation and succession, and mixing them up is where most confusion starts.
• The stakes: get the structure wrong and a buyer can end up personally liable for company debts they assumed were ring-fenced, a company reclassified as “fictitious” by the tax authorities for neglected paperwork, or a share-transfer tax saving that turns out far smaller than expected.
• The solutions: match the vehicle to the actual goal — a family chalet held for the long term is not the same problem as a commercial rental business — understand what liability protection a structure genuinely offers, and have the bylaws and the purchase route reviewed by a notaire before any money moves.

Buying a property in the French Alps in your own name is the default, but it is not the only route, and for business and company law matters generally, the choice of vehicle shapes far more than the deed itself — it shapes liability, taxation, and how the property eventually passes to the next generation. This guide sets out how the main structures actually differ, where the genuine benefits sit, and where a couple of common assumptions do not hold up as neatly as they are often presented.

Buying in your own name, or through a company

Buying as an individual links the property directly to your personal estate: standard French succession rules apply, and the value sits in your own wealth tax (IFI) calculation without any intermediate step. A company, by contrast, is a separate legal person: the property belongs to the company, and what you hold is shares. This distinction is genuinely useful for managing shared ownership, structuring rental activity, or planning a gradual transfer of value to children — but it is not, by itself, a shortcut around French tax or succession rules, and how much protection it actually adds depends heavily on which structure is chosen.

The main vehicles, and how they actually differ

The SCI is the most frequently used vehicle for holding a family property, precisely because it is not built for trading: it exists to hold and manage real estate, and its shares can be split, gifted or inherited far more flexibly than a jointly owned property in indivision. We compare it directly against indivision and the tontine clause, the other two common ways of holding a property with someone else, in our guide to joint ownership of French property.

SARL and SAS structures sit at the other end of the spectrum: genuinely commercial companies, better suited to running a furnished-letting business at scale, where the ability to deduct expenses and depreciation against rental income under corporate tax can meaningfully reduce the taxable base — though, as covered further down, this same depreciation mechanism works against the owner on a later resale.

Foreign companies — a UK limited company or a US LLC, for instance — can hold French property directly, but this generally brings a specific French tax consequence that surprises non-resident owners: the annual 3% tax on the property’s market value, due unless a qualifying exemption applies and the relevant declarations are filed on time. We go through this mechanism, and how it interacts with buying through a company more broadly, in our guide on buying French property through a company: mind the trap.

Asset protection: what a company actually shields, and what it does not

This is worth being precise about, because “using a company protects your assets” is often repeated as if it applied evenly across every structure — it does not.

An SCI does not, on its own, protect its shareholders from personal liability. Under Article 1857 of the Civil Code, SCI shareholders remain personally liable for the company’s debts, without limit, in proportion to their share of the capital. This liability is not joint — a creditor cannot demand the full debt from a single shareholder — and it is subsidiary, meaning creditors must first pursue the company itself and establish that this has failed before turning to the shareholders individually. But the underlying exposure is real: an SCI shareholder’s personal assets are not automatically ring-fenced from the company’s debts the way a shareholder’s assets in a SARL or SAS are.

SARL and SAS shareholders, by contrast, generally risk only what they contributed to the company. This is the structural reason a commercial rental activity is often better suited to one of these vehicles than to an SCI: not primarily for tax reasons, but because the liability profile is fundamentally different.

Estate planning and succession

Where a company genuinely earns its keep for many Alpine families is succession planning. Rather than transmitting the chalet itself, parents can gift company shares gradually, and France’s gift-tax allowance of up to €100,000 per parent, per child, renews every 15 years — meaning two parents can pass €200,000 of share value to each child, tax-free, every 15 years, while retaining the usufruct (the right to use the property or receive its rental income) if they choose.

Example. A Dutch family sets up an SCI to buy a €1.4 million chalet in Val Thorens. Over time, the two parents gift bare ownership of shares to their two children, using the full allowance available to each parent–child pair. Across one 15-year cycle, this allows up to €400,000 of the chalet’s value to move to the next generation without gift tax, while the parents remain the company’s managers and continue to use the property exactly as before.

Taxation and transfer costs

Regardless of structure, taxe foncière remains due every year, and rental income is taxed either under personal income tax or corporate tax depending on how the company is set up. For furnished-letting activity run through a company, our guide to taxation in France covers the depreciation mechanism in more depth — including a detail worth flagging here: a company’s capital gain on resale is calculated from the property’s depreciated value, so the taxable gain can grow rather than shrink the longer the company has owned the asset, unlike the individual ownership regime.

Transfer duty on the initial purchase follows the standard registration duty rates whether the buyer is an individual or a company — currently around 5.8% to 6.3% of the price for an existing property, depending on the département. Where the deal instead takes the form of buying shares in an existing property-holding company, the rate can be lower, but by how much depends entirely on the company itself:

This is a genuinely useful distinction: buying the shares of an SCI (almost always classed as real-estate-predominant) saves perhaps one percentage point against a direct property purchase — a modest saving, not a dramatic one. The larger savings on share deals apply to companies whose assets are not predominantly real estate, which is a narrower and more specific situation than “buying shares is cheaper” suggests.

The role of the notaire

When a company is involved, a notaire’s due diligence extends beyond the property itself: verifying that the company’s objet social (corporate purpose) actually permits property investment, that the manager has the power to sign for the purchase and any related mortgage, and that the bylaws are drafted around the buyer’s actual goals rather than copied from a template. Registration of the property with the French Land Registry follows the same process as an individual purchase, adjusted for the company as the registered owner.

A practical mechanism worth knowing about: buyers sometimes sign the preliminary sale agreement (compromis de vente) in their own name — even where the intention is for a company to complete the purchase — specifically to preserve the 10-day statutory cooling-off period, which applies to an individual non-professional buyer but not to a company. A substitution clause (clause de substitution) is then used to transfer the buyer’s position to the SCI or other company ahead of the final deed. The individual signatory typically remains jointly bound for the purchase price and the contract’s obligations unless the substituted company itself completes the sale.

Risks and administrative realities

Owning a company is more than holding a deed — it comes with ongoing obligations that are easy to underestimate:

• Annual formalities. Accounts, general meetings, and the relevant tax filing (form n°2072 for an SCI under income tax) are not optional extras. Neglecting them consistently is one of the ways the tax authorities can treat a company as “fictitious”, unwinding the tax and succession benefits the structure was set up to provide.
• Running costs. Accounting and administrative management have a real, recurring cost, on top of the setup costs for drafting bylaws and registering the company.
• Cross-border tax treaty risk. For non-residents, how a French company interacts with the tax treaty between France and their home country needs checking specifically — assuming home-country rules apply, or that a company automatically avoids double taxation, is a common and avoidable mistake.

Steps to buy through a company

• Define the strategy — choosing between an SCI, a SARL, a SAS or another structure based on the actual goal (family holding versus commercial letting) and tax profile.
• Sign the sale agreement, often personally with a substitution clause, to preserve the individual cooling-off period.
• Draft the bylaws, tailored to the buyer’s situation rather than a standard template.
• Register the company, obtaining its Kbis extract from the Commercial Registry.
• Sign the final deed, with the notaire confirming the company’s capacity to act before the transfer completes.

Which structure fits your project?

• Buy directly, in your own name, if: the property is for personal use only, there is no other co-owner to coordinate with, and there is no particular succession complexity to plan around.
• Consider an SCI if: several people (often family) are buying together, the goal is long-term holding and a gradual transfer of value to children, and the property will not be run as a habitual furnished-letting business.
• Consider a SARL or SAS if: the property will be operated as a genuine rental business, and limiting personal liability to what was contributed matters more than the flexibility an SCI offers for family transmission.

Common pitfalls: a quick reference

Frequently asked questions

Can a foreigner set up an SCI to buy property in France?
Yes — there is no nationality restriction on being a shareholder or manager of a French SCI.

Does an SCI protect my personal assets from creditors?
Not in the way a SARL or SAS does. SCI shareholders remain personally liable for company debts, proportionally to their shareholding, though creditors must pursue the company first.

Is it cheaper to buy the shares of a company that owns a property than to buy the property directly?
Sometimes, but the saving is often smaller than assumed — an SCI share purchase is typically taxed at 5%, against 5.8% to 6.3% for a direct purchase of an existing property.

Can I use a company I already own abroad to buy a French property?
Yes, but this generally triggers the annual 3% tax on the property’s market value unless a specific exemption applies and the correct declarations are filed on time.

What happens if I stop holding the required annual meetings for my SCI?
Persistent neglect of these formalities is one of the grounds the tax authorities can use to treat the company as fictitious, which can unwind the tax and succession benefits it was set up to provide.

Sources

• Code civil — Article 1857 (SCI shareholder liability)
• Code civil — Article 1858 (creditors must pursue the company before the shareholders)
• Code général des impôts — Article 726 (registration duty on share transfers)
• Impots.gouv.fr — 3% tax on the market value of French property held by certain entities

In summary

Buying through a company can be a genuinely useful tool for holding an Alpine property with others and passing it on gradually — but the benefits are specific to the structure chosen, not a general property of “buying through a company” as a category. An SCI suits a family holding and gradual transmission; it does not shield personal assets the way a SARL or SAS does. A commercial structure suits a genuine rental business; it does not offer the same succession flexibility. Matching the vehicle to the actual goal, with the bylaws drafted around that goal rather than downloaded from a template, is where a notaire’s review tends to add the most value before the purchase is signed.

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