Real Estate Wealth Planning: IFI, SCI, Usufruct

Structure your acquisition before signing: IFI, SCI, usufruct, gift-sharing. Tax optimisation cannot be corrected afterwards.

Discuss your project confidentially

Acquiring a prestige property without first analysing the legal and tax structure is a serious wealth planning error. A well-structured family SCI can reduce your IFI by a factor of ten over three generations. A temporary usufruct can exclude 100% of a property's value from your taxable estate for 15 to 20 years. Our wealth planning unit, in partnership with notaries, tax experts and specialised lawyers, designs the structure BEFORE signing the preliminary contract — never after. Each scenario is quantified, compared and formalised.

In-depth analysis

IFI on Prestige Real Estate: 8 Optimisation Levers

The Real Estate Wealth Tax (IFI) applies to net real estate assets exceeding €1.3 million. For a buyer of a €5 million property, the annual IFI can exceed €40,000.

Main levers: family SCI taxed under corporate tax (IS), temporary usufruct in favour of a company, structuring debt, furnished non-professional rental (LMNP), woodland and forests, historic monuments, Malraux scheme, real estate OBO.

Each lever must be studied in coherence with your overall situation (other income, intended transmission, holding period).

Family SCI: Why, How, For Whom

The Société Civile Immobilière allows holding one or several properties within a company, with shares distributed among family members.

Advantages: facilitates transmission, protects against divorce, optimises IFI (if structuring debt), avoids contentious co-ownership, enables progressive donation of shares (with a renewable allowance every 15 years).

To consider: corporate tax (IS) vs income tax (IR) regime, duration of statutes, management, approval clauses.

Creation cost: €2,500 to €4,500 (notary + registration).

Usufruct / Bare Ownership Split

Usufruct divides ownership into two parts: the usufructuary enjoys the property (occupation, rents), the bare owner holds the legal title.

Temporary usufruct: a bare owner (often an SCI or a child) acquires bare ownership for 60 to 70% of the value, to be restored 15 to 20 years later without transfer tax.

Life usufruct: allows a parent to occupy the property until death while transferring bare ownership to children with optimised tax cost.

This arrangement requires precise notarial drafting to avoid tax requalification.

Gift-Sharing and Early Transmission

Gift-sharing with usufruct reservation is one of the most powerful tools for wealth transmission. It allows parents to:

- Transfer the bare ownership to their children today (typical value: 70% of the price). - Retain enjoyment of the property until death. - Benefit from legal allowances: €100,000 per child, per parent, renewable every 15 years. - Fix the property value at the date of donation, thus shielding future capital gains.

Case Study: €6M Buyer — Tax Savings Over 15 Years

Profile: family with 3 children, acquisition of a €6 million secondary residence in Cannes.

Scenario A (direct acquisition, no structure): IFI ~€50K/year × 15 years = €750K. Inheritance tax at term: ~€1.8M.

Scenario B (family SCI + 18-year temporary usufruct + bare ownership donation): residual IFI ~€12K/year × 15 years = €180K. Inheritance tax at term: ~€280K.

Net gain over 15 years: ~€2 million.

Our key engagements

Real Estate Wealth Planning: IFI, SCI, Usufruct

Written wealth study with quantified scenarios over 15 years

Coordination with selected notary, tax expert and lawyer

IFI optimisation, family SCI, usufruct, gift-sharing

Intergenerational transmission modelling

Absolute confidentiality (NDA + professional secrecy)

Frequently Asked Questions

Everything you need to know before your project

When does wealth planning advice take place in the project?

Ideally before signing the preliminary sales agreement. Once signed, many optimisations become impossible or very costly (for example, creating an SCI afterwards incurs transfer duties).

Do you work with my current notary?

Yes. We systematically coordinate with your usual notary. If necessary, we propose a notary specialised in prestige wealth to intervene collegially.

Is it always necessary to create an SCI for a prestige property?

No. The SCI is a tool, not an obligation. For a single investor without transmission plans, it can increase taxation. The wealth study determines the best approach.

Life usufruct or temporary usufruct: which to choose?

Life usufruct suits family transmission from parent to child. Temporary usufruct is suitable for an investor seeking to remove a property from their taxable estate for 15-20 years (often with an SCI as bare owner).

How much does the wealth planning study cost?

Fixed fee from €1,800 to €4,500 excluding VAT depending on file complexity (number of properties, presence of foreign elements, existing usufruct…). This fee is deductible from brokerage fees upon acquisition.

Is the Historic Monuments scheme still worthwhile?

Yes, for estates with very high taxation (top marginal rate 45% + IFI). Deducting works and charges from global income without limits makes it unique. But the property must be officially classified/registered, and renovation supervised by the Bâtiments de France.