12 Questions
What is a bond?
A type of loan issued by a State, a local community or a company
What is the daily volume of the FOREX market?
More than 6,000 billion dollars/day
What is the dismemberment of property?
The division of a property into two parts: the bare ownership and the usufruct
What is the purpose of an SCI?
To hold and manage real estate assets
What is the micro-BIC regime?
A tax regime for rental income from furnished rentals
What is the main advantage of investing in an SCI through life insurance?
Less regulatory restrictions compared to SCPIs
What is the purpose of the family SCI?
To facilitate the holding, management, and transmission of one or more real estate assets
What is the maximum amount a parent can give to their children every 15 years without paying transfer duties?
€100,000
What is the main disadvantage of investing in SCPI shares in bare ownership?
No regular income
What is a temporary usufruct?
A legal arrangement to help relatives without stripping oneself and reduce tax bill on real estate wealth
What is the main criterion to consider when buying property for rental investment?
Location
What is the rental investment in real estate popular in France?
It offers possibilities for additional income, tax advantages, and credit leverage
Study Notes
- The bond market is one of the largest markets, representing hundreds of billions of euros with daily exchanges exceeding 10,000 billion euros/day.
- A bond is a loan issued by a State, a local community or a company.
- The stock market represents fewer transactions than the bond market.
- A share represents a fraction of the capital of a company.
- FOREX is the largest market in the world, with a daily volume of more than 6,000 billion dollars.
- The money market is a sub-part of the bond market, reserved for institutions and considered a place of liquid exchange and where the risk is very limited.
- The dismemberment of property consists of dividing a property into two parts: the bare ownership and the usufruct.
- The dismemberment of property occurs most of the time in the family, and it is possible to give during one's lifetime the bare ownership of a property to one's children, for example, and to retain the usufruct.
- The family SCI allows people united by a bond of kinship or alliance, to facilitate the holding, management and transmission of one or more real estate assets.
- It is possible for a parent to give €100,000 every 15 years to their children, without paying transfer duties.
- Joint ownership of property can lead to conflicts among heirs after the death of one partner.
- Dismemberment of securities portfolio and beneficiary clause of life insurance contract allow for double transmission of capital to multiple beneficiaries.
- Temporary usufruct can be used to help relatives without stripping oneself and reduce tax bill on real estate wealth.
- SCPI shares in bare ownership offer discounts and exemption from income tax, but no regular income and reduced liquidity.
- Real estate market in France is dynamic with high transaction numbers and increasing prices.
- Rental investment in real estate is popular in France and offers possibilities for additional income, tax advantages, and credit leverage.
- Yield is an important criterion to consider when buying property for rental investment.
- Micro-BIC regime applies a flat-rate allowance of 50% to rents for furnished rentals.
- SCI is a form of civil society for managing or renting out real estate assets.
- Real estate investment can be used to build up a heritage that can be passed on.
- An SCI is a type of French civil society created to hold and manage real estate assets.
- It has a civil purpose and cannot engage in commercial activities.
- SCI is useful for joint ownership of property to avoid conflicts between co-owners.
- The management of the property is entrusted to one or more managers.
- SCIs can be invested in through life insurance or a PER.
- The regulatory framework for SCIs is less restrictive when invested in through life insurance.
- Entry fees for SCIs through life insurance are lower compared to SCPIs.
- Novaxia R, SCI Silver Avenir, SCI Capimmo, and SCI Top Pierre are some of the main Unit-Linked SCIs.
- These SCIs specialize in different types of real estate properties.
- The yields for these SCIs range from 4.04% to 6.75% in 2022.
Explore key concepts related to French real estate investment, including SCIs, joint ownership, dismemberment of property, rental investments, and tax advantages. Learn about different types of SCIs, their roles, benefits, and how they can be managed through life insurance or PER. Discover important factors to consider when investing in French real estate for rental income or wealth building.
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