LMNP or SCI: which structure should you choose to invest in new-build property in 2026?

Are you considering investing in a new property? One question comes up regularly: should you go through a LMNP (non-professional furnished letting) or an SCI (société civile immobilière)? These two tax and legal structures do not meet the same needs, and the choice can significantly affect your returns, your taxation and your administrative management.

This article compares the two approaches to help you decide according to your investor profile.

Understanding the two structures

The LMNP: non-professional furnished letting

The LMNP is a tax regime allowing you to let a furnished property (a dwelling equipped with functional furniture) as a private individual. You remain the owner in your own name, but benefit from specific taxation on rental income.

Main features:

• You declare your LMNP income as an individual on your personal tax return.
• The letting must be furnished (bed, kitchen, equipped bathroom, etc.).
• No legal entity needs to be created.
• Simplified administrative management (no articles of association, no general meetings).

The SCI: société civile immobilière

The SCI is a legal entity created to acquire, manage and operate a property portfolio. It allows several partners to become joint owners in co-ownership of a property.

Main features:

• You create a separate legal entity with articles of association and registration with the RCS.
• The partners are co-owners through the SCI.
• Taxation depends on the chosen regime (transparent, corporation tax).
• More complex administrative management (partners' meetings, annual accounts, etc.).

Detailed comparison: LMNP vs SCI

1. Taxation of income

Under the LMNP

Rental income from a LMNP is subject to income tax in the category of industrial and commercial profits (BIC).

You have the choice between two regimes:

• Micro-BIC: you benefit from a flat-rate allowance of 50 % on your excluding tax income if it does not exceed an annual threshold (to be checked for 2026). Very simple administratively.
• Actual regime: you deduct all your actual expenses (loan interest, works, insurance, property tax, management fees). More complex, but potentially more advantageous if you have substantial expenses.

Under an SCI

Taxation depends on the chosen tax regime:

• Transparent regime (default): each partner is taxed on their share of the result as property income. Income is taxed at the progressive income tax scale.
• Corporation tax regime (IS): the SCI itself pays tax on its profits. An option that is uncommon for individual property investors.

Key point: Under a SCI with transparent tax treatment, you generally cannot benefit from the micro-BIC regime. You are taxed on gross rental income from property (or net, depending on expenses).

2. Deduction of expenses and interest

LMNP

Under micro-BIC, you benefit from a flat-rate allowance of 50 %, but you cannot deduct your actual expenses. Under the real regime, you can deduct:

• Loan interest (100 %)
• Management fees and estate agency fees
• Works and repairs
• Insurance and taxes
• Co-ownership service charges

SCI

Under the transparent regime, you deduct your actual expenses in the same way as under the LMNP real regime. Loan interest is fully deductible, which significantly reduces taxation during the acquisition phase (when borrowing rates are high).

3. Capital gains on resale

LMNP

• After 5 years: progressive exemption from capital gains (0 % to 5 years, then reducing until 15 years).
• Progressive taxation depending on the length of ownership of the property.

SCI

• After 15 years: full exemption from capital gains (if the asset is property).
• Before 15 years: gain taxed on a reducing scale (longer than under LMNP).
• Critical period: the SCI requires a longer holding period to obtain full exemption.

4. Set-up and operating costs

LMNP

• Set-up costs: almost nil (no structure needs to be created).
• Operating costs: minimal (annual income tax return).

SCI

• Set-up costs: notary or lawyer fees (500 € to 2 000 € depending on complexity).
• RCS registration: approximately 200 € (to be checked 2026).
• Annual costs: accounting, tax return, capital calls between partners (100 € to 500 € per year depending on the provider).

5. Transfer and inheritance

LMNP

• The property remains your personal property.
• Standard inheritance duties apply on transfer.
• Administrative simplification for heirs.

SCI

• Transfer takes place by assignment of shares.
• Taxation on the assignment of shares (transfer duties).
• Potential advantage: organising a staggered transfer through the shares (dismemberment of ownership, partial gifts).
• More complex for heirs to manage (collective management).

What is a typical new-build investment?

Scenario 1: Sole investor, furnished property, significant expenses

Verdict: LMNP under the real regime

You buy a new T2 for 250 000 €, furnish it for holiday or short-term letting, with a loan of 150 000 €. Loan interest is high (years 1-5) and you have substantial management and maintenance costs. The LMNP real regime allows you to deduct all these costs and optimise taxation during the loan period.

Scenario 2: Couple or partners, unfurnished property for long-term letting

Verdict: SCI under the transparent regime

You and your spouse buy a new block of flats together (4 dwellings) to rent out on a long-term basis. You want legal clarity (avoiding joint ownership), simplified management and possible transfer to your children through shares. The SCI gives you a structure and allows you to deduct expenses and interest.

Scenario 3: Investor seeking a rapid exemption from capital gains

Verdict: LMNP after 5 years

You buy a new studio, rent it furnished for 5 years, then resell it. After 5 years, the capital gain is progressively exempt (a shorter period than under an SCI). Interesting if you have a short- to medium-term resale strategy.

The hidden advantages of each structure

Advantages of LMNP

• Administrative simplicity: no formalities for setting up.
• Flexibility: you can easily change the tax regime from one year to the next (micro-BIC ↔ real).
• Micro-BIC very advantageous: if your income is moderate and your expenses low, the allowance of 50 % can be very worthwhile.
• Speed of capital gains exemption: 5 years versus 15 years under an SCI.

Advantages of an SCI

• Legal clarity: no messy joint ownership if there are several buyers.
• Succession flexibility: gradual gifts of shares, dismemberment of ownership into usufruct and bare ownership.
• Continuity of management: the SCI does not die, and professional management is simplified.
• Separation of assets: isolating a property or a portfolio in a separate entity.
• Tax regime options: you can opt for corporation tax (IS) (reduced taxation if very profitable).

Pitfalls to avoid

Pitfalls of LMNP

• Furnishing required: letting unfurnished under LMNP is a mistake. You switch to standard rental income taxed under a less advantageous regime.
• Limited micro-BIC regime: above the threshold, you must move to the real regime. Accounting becomes compulsory.
• Progressive capital gains: full tax exemption takes 15 years (as with the SCI), so there is no decisive advantage if you hold for a long time.

Pitfalls of an SCI

• Set-up/operating costs: they weigh on profitability in years 1-2.
• Long wait for capital gains exemption: 15 years is long. Only choose it if it is genuinely legally necessary.
• Tax complexity: annual return of results, closing of accounts, business property tax (to be checked 2026).
• Less flexibility on expenses: if the SCI accumulates deficits, deduction is limited (the property deficit is capped).

Practical case: new-build property investor

Marie buys a new dwelling worth 300 000 € in September 2026, financed by a 200 000 € loan over 20 years.

LMNP scenario (furnished, real regime):

• Gross annual rent: 12 000 €
• Loan interest in year 1: 9 000 €
• Expenses (insurance, property tax, management fees): 3 000 €
• Taxable result: 12 000 − 9 000 − 3 000 = 0 € ⟹ no tax payable
• Capital gain after 7 years on resale: 50 000 € exempt at 70 % (reducing allowance)

SCI scenario (unfurnished, transparent regime):

• Same structure, but SCI set-up costs: −1 500 € (year 1)
• Result: 0 € taxable
• Capital gain after 7 years: exemption only at around 47 % (longer period)

Conclusion for Marie: furnished LMNP is more advantageous if simplified management is sufficient.

How to choose between options with JL HOME?

The choice between LMNP and an SCI depends on:

1. Your family structure (alone? couple? partners?).
2. Your strategy (short term versus long term).
3. Your budget (are you willing to accept SCI costs?).
4. Your property (furnished? unfurnished?).
5. Your costs and interest (significant = LMNP actual; moderate = LMNP micro-BIC).

Our advisers JL HOME help you structure your acquisition from the outset. They analyse your tax profile, your rental yield plans and your wealth objectives to recommend the optimal structure.

Book a free consultation with an expert JL HOME — we will help you choose between LMNP and SCI and secure your new-build investment.

You can also use our tax simulator to quickly compare the two structures based on your parameters.

Summary: comparison table

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FAQ: common questions

Q1. Can I switch from LMNP to SCI after purchase? Yes, but the operation entails formalities costs and potentially capital gains tax if a revaluation of the property is required. Seek advice before proceeding.

Q2. Does furnished LMNP generate more income than unfurnished rental through an SCI? Furnished rents can be higher (short/medium term), but this is a commercial choice, not an obligation. Compare rental rates in your area.

Q3. In an SCI, am I jointly liable for debts? No, only the SCI is the debtor to the bank. You are liable up to the amount of your contributions (unless you personally co-signed).

Q4. Is there progressive taxation under LMNP micro-BIC? No, the 50 % allowance applies as a flat rate. There is no progressive income tax band applied.

Q5. Does the reduced VAT (5,5 %) apply under LMNP and SCI? Yes, at the purchase of the new property (subject to conditions, notably the zone and a request to the seller). It is a property-based tax treatment, independent of the structure.