SCPI: the bottom of the real estate investment that pays 5 times more than the Livret A

4.35% in 2018, who says better? For several years, REITs (Civil Real Estate Investment Trusts) have been leading the way in terms of yield, with a performance of 4.43% in 2017 and 4.35% in 2018. This is 3 times higher than life insurance (euro funds) and 5 times higher than the Livret A yield. While the decline is significant, this investment has become a must for savers, especially those preparing for retirement. We take you behind the scenes of his star investments.

The REITs are not without assets to investors who want to invest in real estate. First, they are accessible from a few hundred euros. Unlike the purchase of a real estate property that requires a significant down payment. The purchase of shares of companies that hold a real estate portfolio composed of diversified assets (businesses, offices, warehouses, serviced residences) and located in the most dynamic cities, or even abroad, offers individuals access to the very closed professional real estate market, with a real sharing of rental risks.

They offer mostly regular income (each quarter in general) without having to worry about the management of a property on a daily basis. On average, performance SCPIs serve between 3 and 8% per year.

Of course, SCPIs do not offer only advantages. Since the transformation of the ISF (Tax on wealth) into IFI (Tax on real estate wealth), real estate assets greater than 1.3 million euros are taxable IFI. The shares of SCPI thus enter this calculation.

SCPI dismembered to escape the IFI

To reduce its tax bill. However, there is a solution: the dismemberment of SCPI shares.

Concretely, it is a question of separating the bare ownership of the shares and their usufruct. The investor who buys the bare ownership owns the shares of SCPI but does not collect the income. He will recover full ownership of the shares at the end of the usufruct. The usufructuary, for his part, receives rents for the duration of the dismemberment.

The first advantage of dismemberment is to offer a discount (between 20 and 40%) on the purchase price of the share. As a result, the reportable value is reduced to the IFI. Finally, one avoids paying taxes on rents collected.

The other tax-efficient solution is to house your SCPI in a life insurance policy. This allows you to benefit from the benefits granted to the life insurance in matters of inheritance, in particular, and especially of softer taxation. The main disadvantage is that life insurance policy costs are added to those of the REIT.

In addition, some SCPI shares held directly are not always easy to resell. Investment must therefore be considered in the long term.

Nearly 8% for market-leading products

But despite these shortcomings, the SCPI boards, as shown by the latest figures. In 2018, SCPIs show a net inflow of more than 5 billion euros. Those invested in the offices made just over half of this collection in front of “diversified” (21%), “specialized” (16%), “retail” (7.5%) and “residential real estate”. “(2.6%).

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