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Tax authorities' recommendations for the valuation of SCIs subject to the IFI tax

Private individuals are increasingly using non-trading property companies (SCI) to acquire and manage real estate. However, when more than 50% of an SCI is owned by persons liable to pay the impôt sur la fortune immobilière (IFI), the value of each partner's holding must be taken into account when calculating the IFI. Against this backdrop, the tax authorities have issued recommendations on the valuationof SCIs subject to the IFI.

To determine the value of each partner's interest, the tax authorities recommend using the method of valuing the share of the SCI's assets and liabilities. This method involves valuing the assets and liabilities of the SCI, then dividing their total value by the total number of shares in the SCI. Then, for each partner subject to the IFI, his shareholding is calculated by multiplying the number of shares he holds by the value of his share of the SCI's net assets.

Start a valuation of an SCI (Société Civile Immobilière) or your real estate assets: https: //xval.fr/valorisation-immobiliere/

How do you value real estate assets?

3 methods of valuing real estate assets are usually used for an SCI:

  1. Comparison method: this involves assessing the value of a property by comparing it with other similar properties that have recently been sold in the same geographical area. Comparison criteria may include surface area, location, amenities, age of the property, etc.
  2. Rental capitalization method: this method consists of assessing the value of a property by calculating the cash flow generated by the rents received, and applying a capitalization rate that represents the expected rate of return on the investment. The result is the property's market value.
  3. Discounted cash flow method: this method involves assessing the value of a property by projecting the future cash flows generated by the building and discounting these cash flows using a discount rate that reflects the cost of capital for the investment. The result is the net present value (NPV) of the property.

However, if the SCI owns rented property, it is advisable to use the rental capitalization valuation method. This method involves multiplying the annual rent by a capitalization coefficient, which represents the expected rate of return on the real estate investment. The result is the property's market value.

For SCI owners subject to the IFI, it is important to take account of their shareholding in the value of the société civile immobilière. By using the valuation methods recommended by the tax authorities, associates can avoid valuation errors that could lead to tax reassessments.

For an accurate, reliable valuation of your SCI subject to the IFI according to the recommendations of the tax authorities, XVAL is an efficient, easy-to-use service. Thanks to our online platform, you can carry out a professional valuation of your SCI in just a few clicks, using the valuation methods recommended by the tax authorities.

Start a valuation of an SCI (Société Civile Immobilière) or your real estate assets: https: //xval.fr/valorisation-immobiliere/

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