Life insurance and real estate: still a winning combination?

Real estate reassures in turbulent times. Stone, a tangible investment, offers a long investment horizon free from stock market fluctuations. It also acts as a bulwark against inflation. This is why real estate investment companies (SCPI) continue their insolent growth. These products give access to rental real estate, often professional, without having to suffer the inconvenience of property selection or rental management.

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Accessible at low cost, they allow savers to invest in a diversified portfolio of real estate and to receive in return the share of rents corresponding to their investment. A format that seduces!

According to the French Association of Real Estate Investment Companies (Aspim), SCPIs recorded record inflows of 5.2 billion euros in the first half of 2022. The enthusiasm of the French was reinforced by the good performance of SCPI returns. in recent years, despite the pandemic. In 2021, the latter yielded 4.45% on average, according to the Institute for Real Estate and Land Savings (IEIF).

The main disadvantage of SCPIs lies in their taxation. Rental income is in fact taxed according to the marginal tax bracket of the investor’s household and is also subject to social security contributions of 17.2%.

For a household taxed at 30%, it is therefore almost half of the dividends received that are taken. And much more for households located in the highest brackets of the scale. Life insurance represents an oasis for these highly taxed savers. Indeed, as long as the winnings remain in the contract, they are not taxed. At the time of exit, they benefit from the advantageous taxation of the envelope, which provides for significant reductions after eight years of detention.

No period of enjoyment

Life insurance has two other advantages that are sometimes overlooked by savers.

First, subscription fees are often reduced. For a share worth 100 euros directly, you can for example obtain it at 97 euros with the insurance envelope (the costs are integrated into the price of the share).

Then, by housing your SCPI in a life insurance contract, you do not support the period of enjoyment. “The latter corresponds to the period between the date of subscription of an SCPI and the moment when the saver is entitled to receive his first dividends”defines Paul Bourdois, the founder of the broker France SCPI, in his book SCPI for Dummies (First, 240 pages, 12.50 euros). It gives the management company time to invest the money in the real estate market. It is usually between four and six months. In life insurance, it is therefore as much time – and money – saved for the saver.

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