The French real estate market is going through a period of adjustment. Interest rates, after a rapid rise, are stabilizing. Prices in certain metropolitan areas are declining while medium-sized cities are gaining attractiveness. In this context, the question of asset diversification through real estate arises with renewed parameters, particularly since the tax changes introduced by the 2025 finance law.
Reintegration of LMNP Depreciations: A Tax Change that Reshuffles the Cards
Since the 2025 finance law, depreciations applied in LMNP under the real regime are reintegrated into the calculation of taxable capital gains upon resale. This tax shift profoundly alters the calculation of net profitability for furnished property investors.
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In practical terms, an investor who depreciated their furnished property each year to reduce their current taxation sees this saving reclaimed by the tax authorities at the time of sale.
The impact is not marginal. According to analyses from the CPIM firm, the exit taxation on an average operation can rise from €20,000 to €50,000 in additional tax. This extra cost forces a reconsideration of the holding period: below 22 years, taxation heavily weighs on the overall performance of the furnished investment under the real regime.
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For an investor looking to diversify their real estate portfolio, this reform changes the balance between furnished and unfurnished rentals. It also encourages the exploration of investment solutions from ALO Immobilier that allow for comparing different holding strategies before committing.
New Generation SCPI: Real Estate Diversification Without Direct Management
SCPI (Société Civile de Placement Immobilier) represents a frequently cited but rarely analyzed lever for diversification in its recent dimension. The SCPI market has experienced turbulence, with declining share prices in some historical vehicles. In parallel, a new generation of SCPI has emerged.
These recent funds have distinct characteristics:
- They were launched after the correction of valuations, allowing them to acquire assets at adjusted prices, without the burden of an overvalued portfolio inherited from previous years
- Their investment strategy often targets specific segments (logistics, healthcare, hospitality) rather than the general office sector that has concentrated difficulties
- Liquidity and transparency regarding fees are receiving increased attention from management companies, under regulatory pressure
Recent SCPIs buy at lower valuations than historical funds. This technical point, often overlooked, means that an investor entering a new generation SCPI today does not bear the risk of latent depreciation that weighs on some older vehicles.
Some wealth management advisors report that the inflow into these new funds is accelerating. Others remind that their performance history remains too short to draw reliable conclusions about their long-term solidity.
Holding Period and Taxation: The Real Criterion for Diversification in 2024
Asset diversification is not limited to multiplying types of properties. It also hinges on the holding period of each asset, a parameter that the LMNP reform makes more strategic than ever.
The French capital gains tax regime provides for a total exemption from income tax after 22 years of holding, and an exemption from social contributions after 30 years. With the reintegration of LMNP depreciations, fast turnover strategies become significantly less profitable than long-holding strategies.
A diversified real estate portfolio in 2024 benefits from combining:
- Long-holding assets (primary residence, unfurnished rental in high-demand areas) that fully benefit from duration allowances
- Collective vehicles like SCPI to access segments (offices, retail, logistics) without immobilizing too much capital or managing tenants
- A short or medium-term furnished rental segment, calibrated with knowledge of the new exit taxation, with a clearly defined holding horizon from the purchase
This duration-based approach avoids the classic trap of accumulating similar properties in the same area, mistakenly believing to diversify while concentrating geographical and fiscal risk.
Rental Real Estate Market: Contradictory Signals by Segment
The rental investment market sends mixed signals depending on the segments. Major metropolitan areas are seeing their prices stabilize after declines, while medium-sized cities with a large student population are attracting more and more investors, driven by sustained rental demand and more accessible acquisition prices.
In contrast, the office segment remains under pressure. Telecommuting has permanently altered companies’ needs, and vacancy rates in certain business parks are not decreasing. For an individual investor, exposure to the office sector is now more easily achieved through a specialized SCPI than through direct purchase.
New residential properties face another issue: rising construction costs have compressed developers’ margins, limiting the available supply. This scarcity supports prices in new developments but also reduces opportunities for advantageous purchases.
The available data do not allow for a single direction conclusion about the market. Diversification remains a pragmatic response to this uncertainty, provided it is based on fiscal and duration criteria, not just on multiplying properties.