Updated: August 2026
Do you own a property through a French Société Civile Immobilière (SCI) and are considering selling your investment? Unlike a property held directly in your own name, disposing of an asset held through an SCI involves more than simply signing a deed of sale before a notary.
There are two possible routes, each with very different legal and tax consequences: selling the property itself while retaining the company structure, or selling your shares in the SCI while the property remains owned by the company.
This decision is far from insignificant. It determines who ultimately owns what, which tax regime applies to any capital gain, and which formalities must be completed. A shareholder wishing to leave a family SCI individually will not have the same objectives as an investor seeking to dispose of an entire rental property portfolio held through an SCI subject to corporation tax.
This is why the question of selling SCI shares arises so frequently in discussions between property owners and real estate professionals.
In this article, we explain the difference between selling the property itself and selling shares in the company, the procedure for transferring SCI shares, the tax implications of both options, and the respective advantages, disadvantages and precautions involved.
The aim is to give you the information you need to approach this decision methodically before consulting the professionals who can assist you with the transaction.
In summary
- When a property is held through an SCI, there are two options: sell the property itself—the company receives the proceeds—or sell the shares in the SCI, in which case the property remains within the company while its shareholders change.
- The sale of SCI shares is governed by the company's articles of association. In most cases, approval from the other shareholders is required, particularly when the buyer is an external third party.
- From a tax perspective, selling the property triggers the applicable property capital gains regime—with allowances based on the length of ownership where the SCI is subject to income tax—whereas selling SCI shares generally involves registration duties of around 5% and a specific capital gains regime applying to the shares.
- The right option depends on the seller's circumstances, including the length of ownership, whether the SCI is subject to income tax (IR) or corporation tax (IS), the presence of minority shareholders and the prospective buyer's objectives.
- Before selling shares, a full review of the SCI—including its debts, shareholders' current accounts and ongoing commitments—is essential to secure the transaction.
- Working with qualified professionals, including a real estate advisor, notary and chartered accountant, can help avoid procedural errors and assess the tax implications of the transaction.
Selling the Property or Selling the Shares: Two Different Legal Approaches
Selling the Property Held by the SCI
In the first scenario, the SCI itself sells the property it owns.
From a legal perspective, the transaction is similar to a conventional property sale: a preliminary sales agreement is signed, followed by the final deed of sale before a notary, and ownership is formally transferred and registered.
The main difference is the identity of the seller. The seller is the legal entity—the SCI—represented by its manager, rather than an individual owner.
Once the sale has been completed, the proceeds are paid into the company's accounts.
The shareholders do not receive the money directly. They must subsequently decide at a general meeting how the funds will be used.
The proceeds may be distributed as dividends, retained within the company for another investment, or used to repay company debts.
This additional stage can have its own tax consequences, particularly when the SCI is subject to corporation tax (IS).
The SCI continues to exist legally after the property has been sold unless the shareholders decide to dissolve it. It can therefore be retained and used for another property investment project.
Selling Shares: A Change of Shareholders, Not Property Ownership
The second scenario operates very differently.
Here, the property remains part of the SCI's assets, meaning that the SCI continues to own the property.
What changes is the identity of the shareholders: the seller transfers their shares to a buyer, who then becomes a shareholder in the company and acquires the rights and obligations associated with that status.
In practical terms, the buyer never becomes the direct owner of the property. Instead, they own shares in a company that owns the property.
This distinction has significant practical implications, particularly when it comes to financing—banks do not assess a loan used to purchase company shares in the same way as a conventional mortgage—as well as taxation and the future governance of the company.
Selling SCI shares is therefore a transaction involving company securities, governed primarily by company law and the SCI's articles of association rather than conventional property law.
Understanding this distinction is essential before beginning the process.
How to Sell SCI Shares: The Procedure Step by Step
Approval from the Other Shareholders
Most SCI articles of association include an approval clause (clause d'agrément).
Before selling shares to a third party outside the company, the selling shareholder must generally obtain approval from the other shareholders, according to the voting threshold specified in the articles of association. This may require unanimity, a qualified majority or a simple majority depending on the company.
This clause protects existing shareholders from the arrival of a new shareholder they have not chosen.
It is particularly common in family SCIs, where the personal relationship and trust between shareholders—known legally as intuitu personae—is often a fundamental aspect of the company.
In practice, a shareholder wishing to sell their shares must notify the other shareholders and the SCI's manager of the proposed transaction, generally by registered letter with acknowledgement of receipt.
The notification usually specifies:
- the prospective buyer's identity;
- the number of shares being sold;
- the proposed sale price.
The other shareholders then have the period specified in the articles of association to respond. They may approve the sale, refuse it or, in some circumstances, offer to purchase the shares themselves under a right of first refusal.
If approval is refused and the other shareholders do not offer to purchase the shares at an equivalent price, the situation may become difficult for the shareholder wishing to leave the SCI, who could effectively remain locked into their investment.
For this reason, it is essential to review the articles of association carefully before beginning the sale process and, where necessary, seek legal advice to anticipate potential obstacles.
Drafting the Share Transfer Agreement and Registration Formalities
Once approval has been obtained—or where the articles of association do not require approval for transfers between existing shareholders or certain family members—the sale of SCI shares must be formalised through a share transfer agreement.
This can be drawn up as a private agreement or as a notarised deed.
The agreement specifies key information including the number of shares transferred, their value, the agreed sale price and the payment terms.
The agreement must then be registered with the French tax authorities, generally within one month of signing.
At this stage, the registration duties applicable to the transfer are paid.
The transfer must also be notified to the company in order to be enforceable against it, and both the SCI's articles of association and shareholder register must be updated to reflect the change in ownership.
The relevant information must also be filed with the competent commercial registry so that the change is officially recorded and enforceable against third parties.
The Role of the SCI Manager and Corporate Documents
The SCI manager plays a central role throughout the process.
They receive the relevant notifications, organise the shareholder approval meeting where required, and update the company's articles of association and shareholder records once the transfer has been completed.
Although this administrative stage is sometimes underestimated, it is essential to ensure that the transfer is properly recognised by third parties, including banks and the French tax authorities.
Comparing the Tax Implications: Property Capital Gains vs Share Transfer Taxes
Taxation When an SCI Subject to Income Tax (IR) Sells the Property
When an SCI is subject to income tax (IR)—the default tax regime for most family SCIs—the company is fiscally transparent when it sells a property.
The capital gain is therefore taxed directly at shareholder level, in proportion to each shareholder's interest in the company, under the capital gains tax regime applicable to private individuals selling property.
This regime provides progressive allowances based on the length of ownership, eventually leading to full exemption from income tax after a certain holding period and, after a longer period, exemption from social contributions.
In practice, the longer the SCI has owned the property, the greater the potential tax relief, in much the same way as for a property held directly by an individual.
For example, where an SCI purchased a property around fifteen years ago and subsequently sells it for a significant capital gain, the allowances linked to the holding period may substantially reduce—or potentially eliminate—the income tax payable on the gain, while social contributions may continue to apply until the longer exemption period has been reached.
Taxation When an SCI Subject to Corporation Tax (IS) Sells the Property
The situation is very different for an SCI subject to corporation tax (IS).
The capital gain arising from the sale of the property is calculated according to corporate tax rules, taking into account the depreciation claimed on the property over the years.
While depreciation reduces the taxable rental income generated during the ownership period, it also reduces the property's net book value. As a result, it can mechanically increase the taxable capital gain when the property is eventually sold.
Consequently, an SCI subject to corporation tax that has significantly depreciated its property may face a substantial taxable gain, subject to corporation tax and without benefiting from the holding-period allowances available to private individuals.
Furthermore, if the shareholders subsequently wish to receive the sale proceeds in the form of dividends, a second layer of taxation may apply at shareholder level, potentially increasing the overall tax burden of the transaction.
Taxation When Selling SCI Shares
The sale of SCI shares is subject to an entirely different tax regime.
For registration duty purposes, transfers of shares in predominantly property-holding companies are generally subject to a rate of around 5% of the sale price—or the actual value of the shares if higher.
In practice, these duties are usually paid by the buyer unless the parties agree otherwise.
This rate is generally lower than the notary fees and transfer duties associated with purchasing a property directly, which are typically around 7% to 8% for an existing property.
For the seller, where the SCI is subject to income tax, the capital gain arising from the transfer of shares is taxed under the applicable regime for disposals of securities or company rights, provided the SCI is not subject to the property-dealer regime.
The calculation may take into account the original acquisition price of the shares, contributions made to the company and the shareholder's share of profits that have already been taxed during the ownership period.
Depending on each shareholder's individual circumstances, this regime may be more or less favourable. A case-by-case analysis is therefore necessary before determining the sale price.
For an SCI subject to corporation tax, the sale of shares is taxed under the capital gains regime applicable to securities held by individuals, with the potential choice, depending on the circumstances, between the flat-rate tax (prélèvement forfaitaire unique) and the progressive income tax scale.
This point should be reviewed carefully with a tax professional.
Advantages and Disadvantages Depending on the Seller's Circumstances
When Selling the Property May Be More Appropriate
Selling the property held by the SCI may be preferable when the buyer wants to become the direct owner of the property, without having to deal with the constraints associated with a company structure, such as general meetings, articles of association and SCI accounting requirements.
This is often the case when selling to an external buyer who is unfamiliar with the SCI structure and prefers a conventional property purchase that is easier to understand and finance through a bank.
This option may also be particularly relevant when the SCI is subject to income tax and has owned the property for a long time.
In this situation, allowances based on the length of ownership may make the property capital gains tax regime especially advantageous and, in some cases, more favourable than the taxation applicable to the shares.
Finally, selling the property allows the shareholders to dispose of the relevant real estate asset completely. This may simplify their overall wealth management if the SCI is no longer intended to hold other property investments.
When Selling SCI Shares May Be More Advantageous
Conversely, selling SCI shares is often preferred when only one shareholder wishes to leave the company, while the remaining shareholders want to continue holding the property together.
This avoids disrupting ownership of the property for all shareholders and enables one shareholder to exit individually, subject to any approval requirements contained in the articles of association.
This option may also appeal to a buyer wishing to invest in an existing property portfolio without incurring the standard transfer costs associated with purchasing the property directly, since registration duties on share transfers are generally lower.
It can also be used to transfer family wealth progressively, for example by transferring shares to children over time while retaining the SCI as a collective management structure.
Finally, where an SCI subject to corporation tax has significantly depreciated its property, selling the shares rather than the property itself may help avoid the double taxation that could arise from a direct asset sale—first on the company's capital gain and then on the distribution of dividends.
However, this requires a detailed tax analysis tailored to the specific circumstances.
Precautions to Take Before Selling SCI Shares
Carry Out a Full Audit of the Company
Before buying or selling SCI shares, it is essential to conduct a thorough review of the company.
This should include:
- outstanding bank debt;
- guarantees granted by the SCI;
- any ongoing or potential disputes;
- shareholders' current accounts, representing funds advanced by shareholders to the company that should generally be repaid;
- the SCI's tax position over recent years.
A buyer purchasing SCI shares indirectly takes on the company's existing liabilities, unlike someone purchasing the property directly.
The audit should also cover the property itself, including technical surveys, any necessary works and the tenancy situation where the property is rented out.
These factors directly affect the true value of the shares and should therefore be taken into account when negotiating the sale price.
Check the Position of Minority Shareholders
Where an SCI has several shareholders, one shareholder's decision to sell may affect the balance of power within the company.
It is therefore important to review the voting rights attached to the shares being transferred, any rights of first refusal granted to existing shareholders and the majority requirements for significant decisions, such as selling the property, carrying out major works or appointing a new manager.
For example, if a minority shareholder purchases enough shares to become the majority shareholder, the company's governance may change significantly.
These consequences should be anticipated and clearly reflected in the share transfer documentation to prevent future disputes between shareholders.
Work with Qualified Professionals
Selling SCI shares involves company law, tax law and, indirectly, property law.
It is therefore advisable to work with a notary or lawyer when drafting the share transfer agreement, as well as a chartered accountant to accurately assess the value of the shares and anticipate the tax consequences of the transaction, particularly where the SCI is subject to corporation tax.
If your wider objective is to reorganise a larger property portfolio, you may also wish to consider other forms of investment, such as commercial property investment offering regular returns, or the specific considerations involved in selling occupied commercial premises where the property held by the company is leased to a professional tenant.
Similarly, some shareholders who sell their SCI shares may choose to reinvest the proceeds in a managed residence, which provides outsourced rental management and may appeal to investors looking to simplify the management of their future property portfolio.
Contact a Capifrance Real Estate Advisor
Whether you are considering selling the property held by your SCI or transferring your shares, the right decision requires a detailed assessment of your financial, tax and family circumstances.
A local Capifrance real estate advisor understands the property market in your area, can direct you towards the appropriate legal and tax professionals, and can help you objectively assess the value of the property held by your company.
This valuation is particularly important when determining a realistic share price that reflects current market conditions.
You can also start with a free online property valuation to establish the value of the property before entering into negotiations with a potential buyer.
Conclusion
- Selling a property held by an SCI and selling shares in the SCI are two legally and fiscally distinct transactions, with different consequences for both the seller and the buyer.
- The sale of SCI shares is generally subject to an approval clause, which should be carefully reviewed in the company's articles of association before starting the process.
- Registration duties on transfers of SCI shares, at around 5%, are generally lower than the costs associated with a conventional property sale. However, the taxation of any capital gain depends heavily on whether the SCI is subject to income tax (IR) or corporation tax (IS).
- The right option depends on the seller's circumstances, how long the property has been held, the number of shareholders and the prospective buyer's objectives.
- A preliminary audit of the SCI—including its debts, shareholders' current accounts and the position of minority shareholders—is essential to secure any share transfer.
- Seek advice from qualified professionals, including a real estate advisor, notary and chartered accountant, to structure the transaction appropriately and protect your interests at every stage.
FAQ
Can I sell my SCI shares without the agreement of the other shareholders ?
It depends on the SCI's articles of association.
If they contain an approval clause, the agreement of the other shareholders will generally be required, particularly where the buyer is a third party from outside the company.
However, transfers between existing SCI shareholders or members of the same family may sometimes be exempt from approval, depending on the wording of the articles of association.
What Is the Cost Difference Between Buying a Property and Buying SCI Shares?
Purchasing a property directly generally involves notary fees and transfer duties of around 7% to 8% of the purchase price for an existing property.
By comparison, the transfer of SCI shares is generally subject to registration duties of around 5% of the sale price.
This difference partly explains why some buyers may prefer purchasing shares in an SCI rather than acquiring the property directly.
Is the Capital Gain Always Taxed Less When Selling SCI Shares?
No. It depends on several factors, including:
- whether the SCI is subject to income tax (IR) or corporation tax (IS);
- how long the investment has been held;
- the amount of depreciation claimed where the company is subject to corporation tax;
- each shareholder's individual tax circumstances.
There is no general rule that applies to every situation.
A detailed financial and tax simulation should therefore be carried out before choosing between selling the property and selling the shares.
What Happens to an Existing Bank Loan When SCI Shares Are Sold?
When SCI shares are transferred, any loan taken out by the SCI remains with the company, which continues to be the borrower and remains liable to the bank.
The buyer must therefore be informed of the existence and outstanding balance of the loan, as this directly affects the true value of the shares being purchased.
It is advisable to check the situation with the lender before completing any share transfer
Can a Minority Shareholder Block Another Shareholder from Selling Their Shares?
This depends on the approval and pre-emption clauses contained in the SCI's articles of association.
A minority shareholder may have a say in whether a new shareholder can join the company and may even have a right of first refusal allowing them to purchase the shares themselves.
However, a minority shareholder cannot automatically prevent every transfer unless the articles of association specifically grant them that power.
Does the SCI Have to Be Dissolved After Selling Its Property?
No, dissolution is not mandatory.
After the property has been sold, the shareholders can decide to dissolve the SCI if it is no longer intended to hold other assets.
Alternatively, they can keep the SCI in existence and use it for a future property project.
Any decision to dissolve the company must be approved at a general meeting and will involve specific liquidation formalities.
How Is the Sale Price of SCI Shares Determined?
The value of SCI shares depends primarily on the actual value of the company's assets, particularly the property it owns, less the company's outstanding liabilities.
This net value is then considered in relation to the total number of shares.
An accurate valuation of the property, combined with a comprehensive assessment of the SCI's liabilities, is therefore essential to determine a realistic price and minimise the risk of future disputes between the seller and the buyer.
Can I Sell Only Some of My SCI Shares?
Yes.
A shareholder can sell only part of their shares—for example, to bring a new shareholder into the company while retaining an interest in the SCI.
A partial transfer follows the same general procedure as a full transfer, including any required approval, the drafting of a share transfer agreement and registration formalities.
The company's corporate documents must then be updated accordingly.
Still unsure whether to sell your SCI shares or sell the property directly?
Discuss your property sale with a professional and explore Capifrance property listings to compare your property with similar opportunities currently available on the market before deciding which option is best suited to your situation.
Author :
Frédéric Rémy – Director of Commercial Performance
A real estate professional for several years within the Capifrance network, I would like to share with you some essential advice to help you succeed in your real estate project with the support of our advisors.
