Four Ways to Invest in SCPIs : how to optimise your your goals .

There are several ways to buy and hold the shares of these companies. Here's how to optimise your acquisition according to your goals.

Four Ways to Invest in SCPIs  : how to optimise your your goals .
Four Ways to Invest in SCPIs  : how to optimise your your goals .

There are several ways to buy and hold the shares of these company 

Investing in shares of SCPI (Civil Real Estate Investment Companies), consists of becoming a partner of a company that buys real estate business (offices, shop walls, hotel, ...).

 It then manages it for your account, paying you a share of the rents collected. Depending on your situation, your age and your type of wealth, there are different ways to buy these shares. Some allow to lower your tax base, while meeting your objectives.

1. Buy your shares of SCPI ...

This mechanism consists of buying SCPI shares directly. To do this, contact the managing company, your bank or insurer (who will sell you the SCPI of its subsidiary), a wealth management advisor or an Internet platform specialised in these investments.

Attention, with this mode of detention, each year, the property income paid by the SCPI will be taxed with your marginal portion of tax and subjected, in addition, to the social levies of 17,2%, that is to say a maximum taxation of 62,2 % (45 + 17.2%). In addition, the value of SCPI units includes the taxable base at the IFI (Real Estate Tax).

To minimise your tax burden, this solution is preferred if you are not or little taxed and do not hold or little rental real estate. This will allow you to avoid increasing your property income or jumping to slice at the IFI.

• Advantages : an investment calibrated according to your means, the choice of SCPI, immediate income.

• Disadvantages : a 100% taxation of the income paid by the SCPI, no leverage and therefore a limited investment in your personal contribution.

2. ... Or on credit

Alternatively, buy SCPI units by financing all or part of the acquisition with a loan. The bank that finances your operation will verify your creditworthiness criteria. Be careful, if you plan to buy SCPIs other than that of its management subsidiary, you will have to negotiate hard to get your credit.

The other solution is to raise your loan file by a credit broker or contact the management company of the SCPI in which you want to invest, to find out if it has a partnership with a financial institution.
The interest of a purchase on credit is that the loan interest is deductible from the property income.

Thus,

your taxable base is reduced in the first years, the interest portion being high in the monthly repayments at the beginning of the credit. The tax savings will be higher the higher your marginal tax bracket.

• Benefits : You can take advantage of the credit leverage and invest more than your starting bet, optimise your tax (income tax + IFI).

• Disadvantages : cost of credit (interest + insurance + guarantee), possible difficulties to obtain a loan, some SCPI are not accessible on credit.

3. Put SCPI in your life insurance

You can also invest in SCPI shares in your life insurance . Unit-linked contracts offer this type of support. Attention, they are offered by some insurers and SCPI offer is limited by contracts (between one and ten are available).

The main advantage of this method of acquisition is that your savings invested in SCPI, as well as the income generated, are subject to taxation of life insurance.

They are therefore much less taxed than if you hold SCPI live. In addition, the liquidity is optimal, so you can buy or sell shares in a few days.

But beware, it is impossible to invest on credit in life insurance, so you must have a prior saving.

Finally, be aware that the insurer will not necessarily pay you 100% of the income of the SCPI since it may retain a portion of its "profit sharing" (the reserves in which it will draw in case of lower yields) .

• Advantage : more liquidity, very attractive taxation of life insurance.

• Disadvantages : limited choice of SCPI (about 20% of the market is accessible via life insurance), limited choice of life insurance, lower return because contract management fees are deducted from SCPI revenues, impossibility of financing his investment on credit.

4. Invest in temporary dismemberment of property

This mechanism consists in splitting the usufruct (the right to receive income) of the bare ownership (possession) of SCPI shares for a given period, generally from ten to fifteen years.

At the end of the period initially fixed, the dismemberment ends, the usufruct is extinguished and the bare owner recovers the entire ownership of the shares and receives the income in turn.

Depending on your objectives, two choices are possible: 

- You buy the temporary usufruct: this allows you to guarantee regular income for a given period, for a smaller initial investment, since you only buy the usufruct.

- You buy the bare-property temporary: as you do not receive any income during the period of dismemberment, you are not at all taxed (even under the IFI, by the usufructuary).

 If you are heavily taxed, it is a great way to build wealth to supplement your retirement pension without exploding your tax during your period of activity.
  • • Advantages : usufructuary and bare owner benefit from a discount on the purchase of the dismembered shares (the longer the dismemberment is, the less the bare ownership is worth), for the bare owner: optimal taxation during dismemberment . 

• Disadvantages : all the SCPI are not sold in dismemberment, during the dismemberment: no income for the bare owner, when it ends: the usufructuary loses all right to income.


thanks for the time .

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