Disclaimers and risk factors
You are investing in a tax-deductible property deficit SCPI, which allows unit holders to benefit from the tax-deductible property deficit regime. Under the common law tax-deductible property deficit regime, unit holders may deduct from their property income (up to a limit of €10,700 on their total income) the proportion of maintenance, repair and improvement expenses (in the case of residential premises) and maintenance and repair expenses (in the case of retail premises) incurred by the company on the properties it has acquired, in accordance with Articles 31 I-1° and 156 I-3° of the French General Tax Code (CGI).
When investing in this type of SCPI, you must consider the following factors and risks: your investment entitles you to the tax advantages set out in the section entitled ‘Potential profitability targets’ and in the section entitled ‘Tax regime for partners’ in this document. Before subscribing, you must ensure that this product is suitable for your tax situation: the tax savings only apply in the context of income tax (and under no circumstances corporate tax) and depends on the nature of your income and your tax rate; it should also be noted that the tax treatment applicable to SCPI shareholders (property income and losses, capital gains) may change, either favourably or unfavourably, during the investment period; this is a long-term investment, you must hold your shares for a minimum of three years following the year of subscription, otherwise you will lose the benefit of deducting property losses from your overall income. Given the likely absence of a secondary market, shareholders can only expect to recover their money when the company is dissolved, i.e. after 15 years. The total lock-in period for the investment is 16 years to allow for the total liquidation of the company’s assets, taking into account the time required to sell its assets (1 year); this investment carries a risk of capital loss and the amount invested is not guaranteed; The liquidity of the investment will be very limited, if not virtually non-existent. The tax advantage, which is an important component of the investment’s profitability, cannot be transferred, which means that the possibilities for reselling the shares will be limited, except at very discounted prices. The SCPI does not guarantee the resale of the units; this investment may be exposed to sustainability risk, which is an event or situation in the environmental, social or governance field which, if it occurs, could have a significant actual or potential negative impact on the value of the investment.
The investments underlying this financial product do not take into account the European Union’s criteria for environmentally sustainable economic activities.
The Fund Manager may take out loans on behalf of the SCPI to supplement the financing of its investments, using the potential income received by SCPI DEFICITIMMO, up to a maximum debt ratio of 30%, which was approved by 74% of the votes cast at the Constitutive General Meeting of the SCPI’s partners on 24th November 2021. This amount must be compatible with the SCPI’s repayment capacity, determined based on its ordinary income. This transaction is subject to risk: in the event of a downturn in the property market, the SCPI may be unable to repay the loans taken out. It should be noted that in the event of default on the repayment of a loan and the pledging of shares as collateral for the loan granted by the subscriber, the lending institution may request their sale, resulting in a loss of capital and of the advantage. Furthermore, if the return on the shares purchased on credit is not sufficient to repay the loan, or if the price of the shares falls when they are sold, the subscriber will have to pay the difference.
Beyond the tax advantages, the profitability of an investment in SCPI shares generally depends on:
Any dividends paid to you. Dividend payments are not guaranteed and may increase or decrease depending on the rental conditions of the properties, in particular the date on which the properties are let, the occupancy rate and the level of rents (which may vary randomly over the total term of the investment depending on the economic and property market conditions);
During a total period of approximately 36 months, the SCPI will focus on acquiring the property portfolio (approximately 18 months) and carrying out restoration work (approximately 18 months), with the acquisition and restoration phases overlapping. Within the meaning of European Regulation 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR), SCPI Déficitimmo is a product that does not promote environmental or social issues and does not have sustainable investment objectives (a product without sustainability objectives, known as an ‘Article 6’ product). The SCPI will only start collecting rent after the first real estate assets acquired at the end of December 2022 have been let, which should happen during 2024. The first dividends can be expected from 2024 onwards and will be paid quarterly in arrears.
– the amount of capital you will receive, either when you sell your shares or when the SCPI is liquidated. This latter amount is not guaranteed and will depend on the sale price of the real estate assets held by the SCPI and changes in the residential property market over the investment period. As such, the profitability of the SCPI can only be assessed at the end of the operations, taking into account all of these parameters, and not solely on the basis of the tax advantages acquired at the time of subscription. Finally, the tax rules in place don’t let you add back the amount of any renovation costs that were deducted from the company’s profits when calculating the taxable capital gain on the sale of the property. This means that the taxable capital gain will be higher if the amount of renovation costs that can be deducted from property income is high.
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