A real estate purchase made in Portugal through a French SCI does not benefit from the same tax and inheritance mechanisms as in France. The Portuguese administration does not always recognize the legal personality of the SCI, which exposes it to divergent tax treatments depending on how the case is structured.
International tax treaties exist, but their application remains subject to interpretation, sometimes generating double taxation or complex administrative procedures. The management, transmission, and taxation of the property are therefore governed by a set of specific rules that differ significantly from French practices.
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Why Portugal is increasingly attracting French real estate investors
Portugal is no longer playing a secondary role in real estate investment from France. In Lisbon, Porto, and the Algarve, the numbers speak for themselves: +7% in Lisbon, +6% in Porto, +9% in the Algarve over one year. This surge is no coincidence. Rental demand is exploding, driven by vibrant tourism and the growing popularity of Portuguese coastal cities.
For those looking to diversify their assets without leaving the eurozone, Portugal is an attractive playground. Prices remain accessible, especially when compared to major French cities. The result? Gross yields that make many French investors envious. Add to that monetary stability, a tax regime designed to attract non-residents, and rental management facilitated by strong seasonality: the equation is increasingly appealing.
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Using a French SCI for purchasing in Portugal allows for flexible management, optimized transmission, and risk sharing. But beware: Portuguese law has its own codes. It is impossible to simply copy the statutes of a French SCI without adaptation. It is better to surround oneself with experts to refine one’s strategy and avoid tax or legal pitfalls. This mode of purchase, favored by families thinking long-term, is part of a fundamental wealth management approach: capturing the Portuguese dynamic while maintaining control over its structuring.
French SCI or SCPI: what solutions for buying property in Portugal and how to differentiate them?
Before diving in, it is essential to distinguish between two models: French SCI or SCPI. The SCI, a civil real estate company, allows multiple people to manage a specific property, often within a family. It is a popular solution for preparing for transmission, customizing management, and making collective decisions. Specifically, a French investor can buy an apartment in Lisbon or a house in the Algarve through an SCI, provided they adapt the statutes and comply with Portuguese legislation. Portugal does not recognize the French SCI: therefore, one must work with local rules and ensure compatibility with reporting obligations.
On the other hand, the SCPI (real estate investment company) plays the card of mutualization. One does not buy a property but shares of a real estate portfolio managed by professionals. The investor does not intervene in management: they receive income, rents, dividends, without managing anything on a daily basis. This approach appeals to those who want to benefit from the real estate dynamic without administrative burdens or on-site management.
| Criteria | French SCI | SCPI |
|---|---|---|
| Structure | Private, customized | Collective, regulated |
| Management | Direct or delegated | Delegated to a management company |
| Assets | Identified property(ies) | Diversified portfolio |
| Transmission | Optimized | Less flexible |
The French SCI attracts those who want to manage their investment themselves, choose their assets, and organize their succession. The SCPI, on the other hand, is aimed at those who prioritize simplicity and diversification, with delegated management and access to broader markets. It all depends on the desired level of involvement and wealth objectives.
Taxation, procedures, and points of vigilance: what you need to know before getting started
Buying in Portugal through a French SCI involves juggling the tax rules of both countries. On the Portuguese side, two taxes frame the operation: the IMT (property transfer tax, paid upon purchase) and the IMI (annual municipal property tax). It is impossible to proceed without obtaining a Portuguese tax identification number, the famous NIF: it conditions access to the bank, the notary, and all procedures.
The signing of the authentic deed takes place before a notary, and the assistance of a seasoned local lawyer is strongly advised to avoid any unpleasant surprises. In France, the SCI must choose between income tax (IR) or corporate tax (IS). The rental income generated in Portugal must be declared using form 2047. Thanks to the Franco-Portuguese tax treaty, the risk of double taxation is limited, but it does not disappear entirely: the annual declaration requires meticulous attention. And for French tax residents, the assets held in Portugal are included in the calculation of the IFI.
Financing also raises its share of questions: Portuguese banks generally require a 20 to 30% down payment, depending on the applicant’s status. French institutions, on the other hand, prefer to secure the loan against a property located in France. The structuring of the SCI requires heightened vigilance: it must comply with French requirements while remaining compatible with Portuguese law. Consulting a lawyer or tax advisor who understands both legislations can help avoid many pitfalls, from incorrect declarations to haphazard income distribution, not to mention the risk of tax reassessment.
To secure a real estate purchase via a French SCI in Portugal, certain reflexes are essential:
- Obtain the Portuguese NIF before any procedure
- Check the application of the France-Portugal tax treaty
- Systematically declare rental income to the French administration
- Evaluate the impact of the IFI on the overall assets
Acquisition, taxation, transmission: each step has its rules and pitfalls. Prepared and well-supported, the French investor can turn a simple purchase into a true asset. The question remains whether, tomorrow, the sun of Portugal will shine as brightly on your real estate project as it does on its beaches.