The starting point: these two structures do not do the same thing
First, an essential clarification: SCI and LMNP are not strictly substitutable. LMNP (Loueur en Meublé Non Professionnel — Non-Professional Furnished Lessor) is a personal tax status reserved for individuals letting a furnished property. The SCI (Société Civile Immobilière — French real estate holding company) is a legal structure distinct from the individual, which can hold one or more properties.
An SCI can never be LMNP. This is an absolute rule. On the other hand, an SCI can hold properties let furnished, provided it opts for Corporate Income Tax (IS) — an SCI under Income Tax (IR) automatically switches to IS as soon as it carries out furnished-letting activity on a habitual basis.
The trade-off is therefore mainly between two options: individual LMNP under the actual-expense regime (most Nice investors) vs an SCI under IS holding the property.
The most common mistake: believing that an SCI under IR can let furnished property and retain the IR regime. False. The tax authorities consider furnished letting to be a commercial activity, which automatically requalifies your SCI as subject to IS.
Individual LMNP under the actual-expense regime: the standard
Individual LMNP under the actual-expense regime is the default status for almost all Airbnb investors in Nice. Its strengths are concentrated on current taxation.
Advantages
You depreciate the property (over 25-30 years) and the furniture (5-10 years), creating an accounting expense that generally wipes out the entire taxable result for 8 to 15 years. In practice: zero income tax on rental income during this period.
You fully deduct all actual expenses: loan interest, property tax, building service charges, CFE (Business Property Tax), insurance, management fees, cleanings, linen, consumables, electricity, water, internet and chartered-accountant fees.
On resale, your capital gain is calculated under the private capital-gains regime, with a progressive tax allowance based on holding period (full exemption from Income Tax after 22 years, full exemption from social levies after 30 years).
Administrative simplicity: no annual general meeting, no annual accounts to file — just a 2031 tax bundle each year.
Limits
Important 2025 reform: depreciation taken is now reintegrated into the capital-gain calculation on resale. If you have depreciated €80,000 over 10 years, those €80,000 are added to your taxable capital gain. This mechanically reduces the net advantage if you plan a medium-term resale.
Income ceiling: if your rental receipts exceed €23,000 per year AND exceed your household's other income, you automatically switch to LMP (Loueur en Meublé Professionnel — Professional Furnished Lessor), with a different tax regime (professional capital gains, social contributions).
Transmission less flexible than via a company: gifting a directly held property is more expensive in transfer duties than gifting company shares.
SCI under IS: when this structure makes sense
An SCI under IS holding furnished rental properties is a more complex structure that becomes relevant for certain profiles.
Advantages
The SCI under IS also depreciates the property and the furniture, which allows it to strongly reduce (or even eliminate) its taxable profit for several years — exactly like actual-expense LMNP on this point.
The IS rate is advantageous for the first brackets: 15% up to €42,500 of pre-tax net result, then 25% above. For an investor in a high marginal income-tax bracket (TMI 41% or 45% under individual LMNP), this gap is significant on profits that are actually taxed.
Optimised transmission: you transmit company shares (with a €100,000 allowance per child every 15 years), not the property itself. The valuation of the shares can be reduced by the debts and the depreciation taken, drastically lowering transfer duties.
Capitalisation: the SCI under IS can reinvest its net profits in new properties without triggering additional taxation at the shareholder level. Ideal for building a multi-property portfolio.
Easier division of ownership: possibility of splitting bare ownership (transmitted to children) and usufruct (retained) by adjusting the company's shares.
Major limits
Double taxation on resale: the capital gain is first taxed at SCI level (at the IS rate, generally 25%), then at shareholder level when capital is recovered (dividends taxed at the 30% flat tax — PFU). In total, the 'tax friction' on resale can reach 40 to 50% of the gain, compared with a maximum of 36.2% under individual LMNP (and with a progressive allowance).
No tax allowance for holding period: unlike individual LMNP, the SCI under IS does not benefit from any progressive allowance on capital gains. You pay full IS, regardless of the holding period.
Administrative complexity: mandatory annual general meeting, annual accounts to file at the registry, chartered accountant required in practice (€1,200 to €2,500 per year of accounting cost), rigorous book-keeping.
Creation of the SCI: expect €500 to €1,500 of initial fees (drafting of articles, registration, legal notice).
No advantages specific to LMP/LMNP: neither equally powerful deductible depreciation (technically it exists but is less favourable than under individual LMNP), nor the actual-expense BIC regime, nor capital-gain exemption at 22 years.
The classic trap: creating an SCI under IS for the sole pleasure of having a 'pro' structure, when individual LMNP would save more tax and be much simpler. If you have 1 to 3 properties in Nice with no immediate transmission objective, LMNP almost always wins the match.
A numerical comparison on a concrete case
Let us take a one-bedroom flat in Nice acquired for €400,000 (of which €320,000 of depreciable building + €30,000 of furniture) with 80% financed by loan. Estimated Airbnb rental income: €38,000/year. Investor in a 30% marginal tax bracket, married.
Scenario: individual LMNP under actual-expense regime
Annual deductible expenses: ~€14,000 (interest, service charges, property tax, CFE, management, cleaning, insurance). Annual depreciation: ~€14,800 (€320,000 / 25 years for building + €30,000 / 7 years for furniture). Taxable result: 38,000 − 14,000 − 14,800 = €9,200. Income tax: 9,200 × 30% = €2,760. Social levies: 9,200 × 17.2% = €1,582. Total tax: ~€4,342/year.
In practice, during the first few years, unused furniture depreciation (often sufficient to absorb the result) brings this figure close to zero. The average real LMNP actual-expense tax on this property would probably be €0 to €2,000/year for 8-12 years.
Scenario: SCI under IS
Similar expenses and depreciation (~€28,800 of total expenses). Taxable result: 38,000 − 28,800 = €9,200. Corporate Income Tax (reduced rate of 15% since < €42,500): 9,200 × 15% = €1,380.
But: if you want to distribute the post-IS profits as dividends, add 30% flat tax (PFU) on the distributed portion. For €7,820 of net profit after IS distributed: 7,820 × 30% = €2,346 extra. Total if full distribution: 1,380 + 2,346 = €3,726/year.
The gap widens on resale
Hypothesis: resale of the property after 12 years, price €480,000 (gross capital gain €80,000).
Individual LMNP: private capital-gains regime + reintegration of depreciation taken (~€150,000 over 12 years). Taxable gain = 80,000 + 150,000 = €230,000. With progressive allowance (12 years = 24% IR allowance and 7.8% social-levies allowance): IR ~€30,000 + social levies ~€36,500 = €66,500.
SCI under IS: gross gain €80,000 + reversal of depreciation (~€150,000). SCI gain = €230,000. IS at 25% = €57,500. If you want to extract the cash from the SCI: 30% PFU on €172,500 = €51,750. Total: €109,250.
Conclusion on this typical case: individual LMNP is more favourable by around €42,750 on the resale of this property — a significant gap that easily offsets the potential current tax savings of the SCI under IS.
The hybrid strategy: combining the two
For investors building a portfolio of 4 or more properties in Nice, the strategy most used by sophisticated wealth holders is the hybrid: keep the first 1-2 properties under individual LMNP (optimal current taxation + capital gains with progressive allowances) and structure the following properties through an SCI under IS (profit capitalisation, optimised transmission, ownership splitting).
This split allows you to have the best of both worlds: a 'personal pocket' tax-optimised to generate disposable cash flow, and a 'company pocket' that capitalises and facilitates long-term family transmission.
For this kind of advanced wealth strategy, the support of a notary and a wealth-specialist chartered accountant is indispensable from the very first transaction.
For whom individual LMNP remains the best option
Individual LMNP under the actual-expense regime remains the winning choice for most profiles in Nice:
- First buy-to-let investment in Nice or portfolio of 1 to 3 properties
- Investor in a moderate marginal tax bracket (up to 30%)
- Long holding horizon (15 years and more)
- No immediate family transmission issue
- Desire for administrative simplicity and moderate accounting costs
- Need to extract direct personal cash flow (not a capitalisation logic)
For whom the SCI under IS becomes relevant
The SCI under IS comes into its own in these specific profiles:
- Portfolio of 4 or more properties, or plan to rapidly develop a portfolio
- Investor in a high marginal tax bracket (41% or 45%) with a need to minimise current taxation
- Goal of early family transmission (children, ownership splitting, wealth holding company)
- Capitalisation as priority: you want to reinvest all net profits without triggering personal Income Tax
- Structured project with a long holding horizon (15-25 years) AND no individual resale plan
- Purchase with several parties (non-family co-investors): the SCI clearly structures each party's rights
Our recommendation for Nice investors
Based on the hundreds of projects we have supported in Nice, our recommendation can be summarised as follows: for 90% of private investors, individual LMNP under the actual-expense regime remains the right default choice. The current tax advantages are superior and the resale advantage (progressive allowances) remains significant despite the 2025 reform.
For the 10% of advanced investors (large portfolios, transmission logic, wealth holding company), the SCI under IS makes sense, but imperatively requires support from a notary AND a chartered accountant both specialised in wealth structuring. The cost of structuring is quickly recouped for these profiles, but errors in initial parameters can be very costly 10 or 20 years down the line.
To understand how this trade-off fits into your personal Nice project, you can consult our full Airbnb investment guide for Nice and our LMNP guide for Nice. For a direct discussion, request a personalised study — we refer you to the right chartered accountants and notaries in Nice based on your profile.
