At what point does one become a real estate investor for tax purposes?

A taxpayer is considered a real estate dealer and changes tax status provided that two conditions are met:

• to engage in transactions for speculative purposes;

• the transactions must be of a routine nature.

The question of whether a company qualifies as a real estate dealer arose in particular in the case of an SCI that had carried out several real estate transactions:

• In 2010, she purchased a building, divided it into six units, and then sold some of the units in 2012.

• In 2011, the real estate investment company (SCI) purchased a building, then subdivided it for cadastral purposes and sold part of the building. In 2017, the company subdivided the remaining portion and sold another part of the building. The SCI retained ownership of one unit, which was occupied by its manager.

• In 2012, the real estate investment company sold a house it had purchased in 2009.

administration had issued a tax assessment to the SCI, finding that it was engaged in real estate trading and that the income had not been taxed under the correct tax regime. The tax assessment was challenged all the way up to the Administrative Court of Appeal.

The authority concluded that the acquisition of the three properties between 2009 and 2011—which were subsequently sold through five transactions over a period ranging from 4 months to 5 years—led it to conclude that the activity was carried out on a regular basis.

With regard to the requirement that there be a speculative intent, the Court finds that the renovation of the buildings, the land subdivision transactions, the fact that certain properties were not rented out, and the short period of time between the purchase of certain properties and their resale demonstrate such intent.

The Court therefore upheld the tax assessment against the SCI and the application of an 80% surcharge for unreported income.

 CAA Douai, August 28, 2025, No. 24DA01320

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