«Tax» SCPI Tax REITs provide a tax advantage (Duflot/Pinel, Malraux, Deficit land) without investing directly. They are an interesting alternative to a real estate investment of on-line tax exemption.
These REITs primarily buy real estate housing nine or old to rehabilitate and intended for rental to individuals.
The offered yield is often lower than that of a REIT's performance but they offer to their unitholders of a tax cut. However this tax reduction is conditioned by the duration of detention of shares. These REITs must therefore be considered in a long-term perspective. Indeed like all REITs c´est a long-term (15 years) investment support that must be acquired with a view to diversification of heritage. Specifically, the resale of the shares on the secondary market exposes the Subscriber to a risk of capital loss and the questioning of the tax benefit.
It y SCPI (valid) Malraux, (most valid) Méhaignerie, Robien (most valid), Ikram, Duflot(plus valable), Pinel (valid), (valid) land deficit SCPI (most valid)
- 1 REITs 'Malraux.
- 2 REITs 'Méhaignerie '.
- 3 REITs 'Robien.
- 4 SCPI «Scellier».
- 5 SCPI «Duflot.
- 6 REITs 'Pinel.
- 7 SCPI of DEFICIT
- 8 Conclusion:
"Malraux" SCPI aims to distribute to the members the tax benefits resulting from the so-called "Malraux law.
The real estate of this type of SCPI consists of old residential buildings in conservation areas; the amount of work is the fiscal deficit which is shared between the partners. These accommodations are rented to private individuals.
Life of a "Malraux" SCPI is a dozen years.
The SCPI (Société civil asset in real estate) have exclusive object the acquisition and management of a real estate rental.
Operative Malraux was set up to rehabilitate the historic quarters of the city centers and participate in the preservation of the french heritage.
Investment Malraux is to finance the acquisition and rehabilitation of old residential buildings, often located in the centre of historic towns. These buildings must be then rented to third parties for a minimum of 9 years, at the end of which they can be owner-occupied or sold.
The subscription in full ownership of REIT shares in heritage private taxpayer opens entitlement to a tax reduction which the applicable rate in 2015 is:
|Property located in the architectural, urban and landscape heritage (ZPPAUP) protection zone
|Property located within a preservation area and ancient degraded areas
The reduction is applicable on the amount of the subscription assigned to eligible expenditure reduction (renovation spending) within the limit of € 100,000 per year.
In the event of acquisition, in respect of the same year, a live well via operative Malraux and SCPI Malraux shares, the total amount of eligible expenditure deductions is also capped at € 100,000.
Objectives and advantages
The tax shares of REIT subscription of type Malraux may be considered by an investor wishing to both a tax reduction (in return for a commitment to conservation of 15 years) but also:
- Regular additional income immediate or long term by using:
-A capital available
-A capacity of savings
- A diversification of its heritage combined with easy handling and secure
- A real estate to restore high standing in the Centre of towns significant and dynamic
- Access to a market usually reserved to institutional investors or very high-tax
- A pooling of risk through diversification of investments in multiple geographies
- Appeal of a "safe haven" investment stone-paper:
-To protect themselves from the volatility of financial markets
-Take advantage of the current market and claim a capital gain in the long term to the resale of the shares.
- The choice between a purchase in cash or credit to optimize investment and reduce the expenditure of initial cash.
Beyond the tax benefits, the profitability of this investment is assessed through any dividends paid. The payment of dividends is not guaranteed, it is decided by the General Assembly and can evolve upward and downward depending on the rental conditions of the buildings (date of rental, the rents, occupancy rate) and rental income resulting. Second that SCPI be sympathetic with regard to the amount of capital or resale shares, either during the liquidation of the SCPI. This amount is not guaranteed and will depend on the evolution of the market of residential real estate by cyclical nature, on the life of the investment.
Thus the profitability of the SCPI may be assessed only on all of its shelf life, not only initial tax reduction.
The interest to acquire credit:
- Deduction of the interests of the land income loan
- Deduction of actual costs involved in the creation of an attributable land deficit on aggregate income within the limit of €10 700.
- Accumulated rents and tax cuts to finance an important part of the acquisition
- The increase in family coverage by the Subscriber through death of credit insurance.
Example SCPI Malraux Urban Prestigimmo 2 from the company URBAN PREMIUM
REITs 'Méhaignerie '.
The objective the REITs 'Méhaignerie', by the name of Pierre Méhaignerie, was to benefit the partners of the double tax advantage of Méhaignerie law (which was intended to promote the construction of new rental housing). The Act is no longer applicable, there is therefore more creation or development of REITs 'Méhaignerie', but simply the existing management.
The secondary market for shares deals usually over-the-counter, knowing that the buyer does not benefit from the initial tax advantage and can therefore, pending liquidation, that benefit from income and expected added value to the output.
These REITs have a life expectancy of twelve to fifteen years in general.
Established by article 91 of the Act, Urbanism and habitat, "Robien" provides, in favour of shareholders who subscribe starting April 3, 2003, the initial capital or capital increases of the SCPI, a deduction in respect of the depreciation of their subscriptions.
This deduction, which applies to irrevocable option of the shareholder exercised when filing its statement of income in the year of its subscription, equals to 8% during the first five years and 2.50% for the next four years of 95% of the subscription price. Then and as long as the rent conditions remain met, the partner can continue to benefit from the deduction at a rate of 2.50% for two three-year periods.
During the period of application of damping:
- the rate of the standard deduction on the tax revenues is reduced from 14% to 6%,
- improvement expenses are deductible under the conditions of ordinary law,
- expenditure on reconstruction and expansion for which a subscription was not opened are not eligible for a deduction in respect of depreciation.
The granting of this advantage is however subject to the condition that 95% of the subscription, valued without taking account of the costs of collection, are used exclusively to finance the purchase of new housing or the future of completion and the commitment State from:
- the company rent acquired homes unfurnished for 9 years to use of principal residence of the tenant respecting the ceilings of rents be fixed each year by Decree.
When a subscription is assigned to several investments, rental of the company commitment must be taken separately for each unit.
The company must provide to each of the partners a certificate in duplicate justifying, for the previous year, market shares.
- the partner to retain all of its units until the end of the period of the rental commitment underwritten by the company for the last housing acquired with its subscription.
The commitment of the unitholder is found on a document attached to the statement of income in the year during which the shares have been subscribed.
If the partner transfers all or part of his shares before the expiry of the period covered by its commitment to conservation of the titles, the tax benefit is questioned by the recovery in revenues, the year in which occurs the event, the deduction for the depreciation of its subscription received. If the transfer of the shares takes place during either of the two triennial periods of prolongation of the scheme, only deductions carried out throughout the period in question are challenged.
The SCPI Scellier succeed the SCPI Robien and allow investors to benefit from the tax regime of the law Scellier through an SCPI.
The features are similar, but the tax system is different: the reduction in taxable income under the Robien law is replaced by a tax reduction of 25% over 9 years (2.78% per year).
Some Scellier REITs in the sector said intermediate (under the conditions of rents and tenants retained in operative Borloo resources), are eligible for a tax reduction of 31% (25% over the nine first years, then 6% more the next three years is 2% per year).
The main disadvantage of the detention of SCPI Scellier (as well as for the SCPI de Robien) is the difficulty of resale, the purchaser of shares with more tax carrot.
The tax reduction rate experienced a reduction in the context of the provisions of the finance law for 2011 on "tax loopholes". For the years 2011 and 2012, the rate is differentiated according to the energy efficiency of housing. Thus the BBC housing (buildings low consumption) enjoy a rate of 22% for 2011 and 20% for 2012. For others, the reduction is only 13% in 2011 and 10% in 2012.
Result of the different tax planes by end of 2011 the Government blows Fillon to reduce public deficits, the scellier was once again modified. The tax reduction will be reduced to 13% of the subscription price in 2012 before the final deletion of operative in 2013. These changes relate well on all of the scellier and is applicable to investments in share of SCPI Scellier.
The SCPI Duflots succeed the SCPI Scellier and can benefit from the tax regime of the Act through an SCPI Duflot. The tax reduction is 18% over 9 years.
The SCPI Pinel succeed the SCPI Duflot and can benefit from the tax regime of the Act Pinel through an SCPI. The tax reduction is 18% over 9 years.
To qualify for the benefits of the Act, 'Patel', must be fiscal french resident. The SCPI Pinel allows the investor to obtain a tax reduction over 9 years with a rental risk relatively low because shared. The investor collects rent for the duration of detention. Investments are made in new buildings that are then rented to private individuals. It is a management company that deals with select property, manage and resell them.
The subscription of shares in REITs may be considered by an investor that has either a capital available, either a capacity savings and looking first for a reduction of tax on income but also of additional revenues regular and immediate or long-term and simplification and comprehensive security for the management of its heritage.
The strengths of the SCPI PINEL
SCPI Pinel is aimed at the establishment of a rental estate consisting of nine residential buildings (BBC standard and in a specific geographical area, see the Patel law) with a good potential for rehabilitation and meeting requirements of overall energy performance (new or restructured properties) and subject to a cap rents and resources of tenants favouring the development of a consistent supply of housing with the needs of the market.
The Pinel device allows, with a commitment to holding of the shares of the REIT over a period estimated at 17 (or 20 years in the case of extension), to benefit from its tax reduction, in the same way as a live investor. Your investment in the REIT, you can benefit from a tax reduction equal to 18% calculated on the basis of 100% of the amount within the limit of €300,000 (per taxpayer and for a taxation year) and distributed linearly over a period 9 years.
At tax level, the share of rent is subject to property tax and real estate gains in the event of resale. For the share of investment income, it is subject to the taxation of securities.
The collective investment enriches all its intrinsic qualities this tax incentive:
- A real estate investment for an amount lower than a direct real estate investment.
- Benefit from a tax reduction. : Tax of 18% reduction calculated on the basis of 100% of the amount subscribed within the limit of €300,000 and distributed linearly over a period of 9 years. In case of extension to 12 years (voted in AG), the tax reduction rises to 21% of the subscription made within the limit of €300,000.
- Collect additional revenue from the rental of buildings: Distribution on decision of the General Assembly
- Save without worry of management: paid rents are net of fees (no unforeseen or additional fees)
- Mutualize the risks regarding the real estate market: Detention of shares in several types of accommodations and several geographical areas
- Placement Stone – Haven: protect themselves from the volatility of financial markets – take advantage of the current market to qualify as a capital gain in the long term
- Purchase cash or credit: in case of purchase on credit, the interests of loan is also deductible:
Depreciable (current rates 2.90% * over 15 years – up to 25 years)
Ultimately (current rates 3.30% * over 15 years to 18 years – maximum recommended 15 years.) * Nominal rate (excluding fees and cost ADI) 19/08/2015
Example of operation d´une REIT, REITs multihabitation 9
SCPI of DEFICIT
Combining both the benefits of common law and the mechanism of the SCPI, the land deficit SCPI may be appropriate for multiple profiles.
Land deficit SCPI is designed the constitution of a rental estate consisting mainly apartment buildings or part of buildings to be restored.
The investor by the subscription of shares of REITs is an estate's value while benefiting from so-called tax "land deficits.
The benefits of common law and the tax REIT:
The advantage is that the SCPI is not a "tax shelter." the subscription and the deduction is not limited: the investor can clear land revenues without limits which allows to deduct all the expenses of renovation of land revenues each year. Beyond and the 1st year the deficit may be charge on total revenues (within the limit of € 10 700). The postponement is possible on land revenues for 10 years. If the operation is made on credit, the interests of loan is also deductible. This allows to save social security levies taken on cleared land revenues. In this case the real estate target town centres allowing a reassessment of capital futures and the resale of shares provides profitability rental d´environ 2.5%.
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