LMNP or SCI à l’IS: which French structure leaves you more money at resale?

The short answer

What changes between the two, in one table

While you hold it: the cash flow year by year

Under both structures, the property, the rent, the charges and the loan are identical. So the year-1 cash flow before tax is the same: -€3,380, meaning you pay in about €282 a month.

Why so little tax? In the first year, the purchase costs (€18,000: notary fees, loan fees and maintenance works) are deducted and create a loss (the simulator deducts them at once under both structures). After that, depreciation (€3,571 a year at first) wipes out the profit. As an LMNP, depreciation cannot deepen that loss. The simulator takes depreciation first, up to the year’s result; the surplus is set aside (up to €14,809 in year 9) and wipes out the result of the following years. The first-year loss is only used afterwards, against what is left; a loss lapses after ten years, and in the example €17,116 could not be used in time (lost at the end of year 11). No text sets the order between the depreciation set aside and past losses: it is a choice of the simulator, to be confirmed by a chartered accountant. In this simulator, income tax only appears in year 19. In the SCI à l’IS, the loss is carried forward too, and the company pays no IS on its rent before the sale (the first would fall in year 23).

Over 20 years, the LMNP owner pays €2,914 of tax on the rent (income tax and social contributions), the SCI no IS at all.

At the sale: where it all plays out

After 20 years, the property sells for €231,798 in both cases, less €11,590 of selling costs; the loan is already repaid. It is the tax on the sale that makes the difference.

As an LMNP, the gain follows the private individuals’ regime: sale price (net of the agency fee) minus purchase price, here increased by the flat 15% works allowance (property held more than 5 years). Since 15 February 2025 (Article 84 of the 2025 Finance Act, Article 150 VB of the CGI, the French General Tax Code), that purchase price is reduced by the depreciation you actually deducted: €60,000 in the example (without the furniture depreciation, €4,000, which the simulator does not add back: the law does not settle this point; adding it back would cost about €594 more). The taxable gain thus goes from €47,708 to €107,708. The holding-period allowances then apply: after 20 years, 90% for income tax and 24.75% for social contributions. Tax: €2,046 of income tax and €13,941 of social contributions (no surtax: the taxable gain stays under €50,000), €15,987 in total, against €7,081 without the 2025 rule.

In an SCI à l’IS, the gain is calculated on the net book value: the purchase price and the furniture (€154,000) minus all the depreciation taken (€64,000), i.e. €90,000. No holding-period allowance: the gain of €130,208 is added to the year’s profit and bears €25,588 of IS. Then, to put the money in your pocket, the SCI repays your shareholder loan account (€100,858, tax-free) and pays out the rest (€93,763), taxed at the PFU of 31.4%: €29,441.

Measured against the total cash put in and when each euro went in, the IRR after the sale is 4.3% a year as an LMNP, against 3.1% in the SCI à l’IS. The detailed SCI calculation (net book value, IS, shareholder loan account, PFU) is in our guide to the return of an SCI à l’IS.

The result depending on how long you keep it

The winner depends mostly on the holding period. Each row below is a full simulation, with the sale at the end of the year shown. In the example, the SCI à l’IS does better for a sale between year 3 and year 5, LMNP from year 7 until the end of the projection (25 years). Sold that early, the property loses money under both structures (negative IRR): the SCI à l’IS simply loses less. For a sale before year 3, both structures give the same return. For a sale in year 6, both structures give the same return.

And depending on your tax bracket

Your tax bracket changes the LMNP return as soon as the property makes a taxable profit.

In the example, LMNP stays ahead at every bracket for a sale in year 25.

What the calculation does not capture

• Passing it on: in an SCI, you can give shares to your children little by little; as an LMNP, you pass on the property itself.
• Selling: as an LMNP, you sell the property. In an SCI, the company sells the property (and pays IS), or you sell your shares: a buyer of shares takes over the company, which is rarer.
• Buying with others: the SCI sets out how the shareholders split things in its articles; several LMNP owners buy in joint ownership (indivision).
• Paperwork: an SCI needs articles of association, full accounts and a meeting every year; LMNP au réel, a yearly profit return.
• Getting out of the SCI: closing the company has a cost (droit de partage, the tax on sharing out the assets, and liquidation costs) that the simulator does not count, as our methodology explains.

Run the numbers on your property

The simulator runs your property under either structure, year by year: cash flow, tax, sale and IRR. To start from an LMNP property, open the demo with Example 02 (LMNP). A second, real and anonymised case shows the same property under both structures: a furnished flat-share as an LMNP (Example 02) and in an SCI à l’IS (Example 04). Letting unfurnished? See Example 03 under micro-foncier.

Before simulating, the rental yield calculator gives the gross and net yields in a few seconds. The terms (depreciation, PFU, IRR) are explained in the glossary.

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