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Investing as couple... or more

Here’s some useful advice about investing in property as a couple, whether you’re married, a member of a PaCS or living together.

How can you invest as a couple?

Do you plan to invest in property as a couple? If you are, it’s important to consider the legal status of your relationship and how the finance will be structured (shared or not), because the legal inheritance and tax provisions relating to property vary from one type of relationship to another. For example, marriage provides the best level of protection for the surviving spouse after the death of a partner, but offers fewer inheritance rights than other types of relationship.
For those looking to invest in property as a group, forming a Société Civile Immobilière (SCI) can provide a simple, flexible solution.
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The PaCS (Pacte Civil de Solidarité)

If you are a member of a PaCS, you will be buying your home under an indivision (undivided possession) agreement, which means that each of you will own half of it (unless the property buying contract gives another undivided possession repartition).
The effect of this is that both of you will be liable for the mortgage payments and outgoings, like insurance, local property taxes, co-ownership charges, etc.
  • Tax allowances : these apply to the overall household tax position.
  • If you separate : one partner buys out the share of the other, or both agree to sell the property. Where neither of these solutions is possible, recourse to law may be necessary.
  • In the event of death : each partner may will his or her half of the property to the surviving partner. Inheritance tax at 40% will be payable on this half.
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Common-law marriage

As with the PaCS, you buy your shared property under an indivision, agreement, but under this arrangement, each partner owns a percentage of the property proportional to the percentage he or she has financed. It’s important to understand though that each owner may ask to sell his or her part at any time.
To prevent any future problems, you can enter into an indivision agreement at the outset. Please ask your notaire for more details.
  • Tax allowances : each individual can claim their own allowances on their share of the property. This share is proportional to their original financial contribution to the purchase of the property under the indivision arrangements.
  • If you separate : if you can’t reach a mutually-acceptable compromise, but did sign a written agreement at the outset, only a judge can terminate the arrangement before its expiry and release the property for sale. Where there is no written agreement and the parties cannot agree on how to proceed, the problem must be resolved by a tribunal de grande instance (district court).
  • In the event of death : if you have signed an indivision agreement, the surviving partner may acquire the share of the property owned by the deceased partner. Where there is no such agreement, the surviving partner has no such right, and the heirs of the deceased will inherit his or her share.
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Marriage

Unless you have entered into a prenuptial agreement, you will be assumed to share your assets equally. All the assets acquired during a marriage belong equally to both partners, so any property you buy belongs equally to both of you.
  • Tax allowances : these apply to the overall household tax position.
  • In the event of divorce : all shared assets are sold and the proceeds shared.
  • In the event of death : the rights of the surviving spouse are protected, although property rights vary where there are other beneficiaries involved. Inheritance tax cannot exceed 40% of the value of the half owned by the deceased partner.
Worth knowing: if you are married under the régime de la séparation de biens, you must sign an individual indivision agreement in order to buy as a couple. Please ask your notaire for advice.
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Investing in property as a group: the Société Civile Immobilière (SCI)

You can buy a property as a group by forming a Société Civile Immobilière (SCI). Every member of the group becomes a partner and holds shares in the SCI. It is therefore the SCI that buys and manages the property.
  • Tax allowances : each partner can claim allowances based on the value of his or her shares in the SCI.
  • In the event of death : ask your notaire for advice because you can have specific articles of association of the SCI.

Worth knowing: you can grant beneficial ownership of your membership shares to your children, who will then receive the rental income.

Your Bouygues Immobilier advisor will guide in you in developing your plans and answer all your questions. Just ask!

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