How to hold French property: own name, joint ownership, tontine clause or SCI

Why the choice matters

The way you hold a French property is fixed in the purchase deed. Changing it later usually means paying transfer duties, notary fees and sometimes capital gains tax, so it is worth deciding before you sign the preliminary contract (compromis or promesse de vente).

Three sets of rules apply at the same time. French property law governs the property itself. The law that governs your estate is determined by the EU Succession Regulation n° 650/2012, which France applies to everyone, including British and American nationals: by default, the law of your habitual residence at death, unless you have chosen the law of your nationality in a will. Finally, French inheritance tax applies to French real estate whatever your residence, and your home country may tax the same property.

Option 1: buying in your own name

This is the simplest structure. The property belongs to you alone, you make all decisions, and on your death it passes under the law that governs your estate. If you are married, check the law governing your matrimonial property regime (determined, depending on the date of your marriage, by the Hague Convention of 14 March 1978 or EU Regulation 2016/1103): it may give your spouse rights over a property bought in your sole name.

Option 2: joint ownership (indivision)

When two or more people buy together without any special clause, they own the property in indivision, each holding the share stated in the deed (often 50/50, or in proportion to what each person pays). The main rules are in articles 815 and following of the Civil Code:

• acts of administration (routine management, most leases) require co-owners holding at least two-thirds of the shares; selling the property requires unanimity, unless a court authorises it (Civil Code art. 815-5-1);
• no one can be forced to remain a co-owner: any co-owner, or the heir of a co-owner, can ask for the property to be divided or sold;
• on the death of one co-owner, their share passes to their heirs, who become co-owners with the survivor.

A written co-ownership agreement (convention d’indivision, Civil Code art. 1873-1 and following) can organise management, expenses and use of the property for a fixed period of up to five years (renewable) or for an indefinite period. For unmarried buyers, the shares in the deed should reflect what each person actually pays; otherwise the difference may be treated as a gift.

Option 3: the tontine clause (clause d’accroissement)

With a tontine clause, the buyers agree that the first to die is treated as never having owned the property, and the survivor as having owned it from the start. The property therefore does not form part of the estate of the first to die, which can protect an unmarried partner.

The clause has real drawbacks. While both buyers are alive, neither can sell or force a sale without the other’s consent, which can create a deadlock if the couple separates. French courts also require a genuine element of chance (comparable life expectancy and contributions); otherwise the clause may be treated as a disguised gift.

For tax purposes, article 754 A of the French tax code (CGI) treats the share received by the survivor as acquired by gift or inheritance. Spouses and PACS partners are exempt from French inheritance tax, but unmarried partners pay inheritance tax at 60%, the rate between unrelated persons. There is one exception: where the property is the common main residence of the two buyers and its total value is below €76,000, the survivor pays the duty applicable to sales instead, unless they opt for inheritance tax.

Option 4: a French property company (SCI)

A société civile immobilière is a French company whose partners hold shares rather than the property itself. It is widely used in France, but it is not always the right answer for foreign buyers.

Advantages	Drawbacks
Shares can be given to children gradually, and ownership can be split between life interest and bare ownership.	Set-up costs, annual accounts, partners’ meetings and tax filings.
Management is governed by the articles of association, not by the stricter co-ownership rules.	Partners are liable for the company’s debts in proportion to their shares.
Shares are easier to transfer between family members than the property itself.	Furnished letting can bring the SCI within corporate tax, with different rules on sale.
Flexible voting rules can protect a surviving spouse or a managing partner.	French inheritance tax and IFI still apply to shares in a company holding French real estate.

US-specific points

For US tax purposes, a French SCI is classified under the US entity classification rules, and the result (partnership, disregarded entity or corporation) can change how rental income, gains and estate tax are treated, and which US information returns must be filed. In some cases an election may be needed or advisable. US citizens are also subject to US estate tax on their worldwide assets. A structure that works well in France can be expensive in the United States, so coordinate with your US tax adviser before you sign.

UK-specific points

France has no trust law of its own (the French fiducie, Civil Code art. 2011, is a different mechanism) and, although it signed the 1985 Hague Convention on trusts in 1991, has not ratified it. A trust holding French property, or with French-resident settlors or beneficiaries, is subject to specific French reporting and tax rules (in particular CGI arts. 792-0 bis and 990 J). HMRC may also treat an SCI differently from the French tax authorities, with consequences for income tax, capital gains tax and inheritance tax. Obtain UK advice before using an SCI or a trust. British nationals can also choose English law to govern their estate under the EU Succession Regulation.

IFI: the French real estate wealth tax

Under article 964 of the CGI, the impôt sur la fortune immobilière is due when the net value of taxable real estate assets exceeds €1,300,000 on 1 January. Non-residents are taxed only on real estate located in France and on shares in companies, including an SCI, to the extent of the French real estate they hold. Married couples and PACS partners are taxed jointly, as are couples in a stable, publicly known cohabitation (concubinage notoire). Once the threshold is exceeded, the tax is calculated from €800,000 at rates between 0.5% and 1.5%, with a reduction for net assets between 1.3 and 1.4 million euros (CGI art. 977). The holding structure does not avoid IFI, but it affects valuation and the deduction of debts.

How we approach the choice

1. We discuss your family situation and what should happen on the death of either buyer.
2. We identify the law governing your matrimonial property regime and your estate, and whether a will or a choice of law is needed.
3. We check the French tax position: transfer duties, IFI, rental income, capital gains and inheritance tax.
4. You check the position in your country of residence and citizenship with your local adviser, using our written summary.
5. We write the chosen structure into the preliminary contract and the purchase deed.

Sources: Civil Code, arts. 815 and following and 1873-1 and following; French tax code (CGI), arts. 754 A, 792-0 bis, 964, 977 and 990 J; EU Regulation n° 650/2012 on successions; EU Regulation 2016/1103 on matrimonial property regimes; Légifrance (legifrance.gouv.fr) and BOFiP (bofip.impots.gouv.fr), consulted in October 2026.

This guide is general information and does not constitute legal advice. Contact the office for advice on your situation.

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