During 2023 Bare property sales in Spain grew by 11% during 2023. According to data from MAS VIDA and the yearbook of the Registrars of Spain, 1.845 operations of this type were formalized last year.
The sale of bare property is a formula that allows those over 65 years of age to sell their habitual residence in exchange for a single payment or a life annuity, maintaining their usufruct; that is, the right to continue using the home for life.
These types of operations that allow obtaining liquidity from real estate assets will continue to grow exponentially in the coming years, since they are an excellent solution to complement retirement pension income.
Those over 65 years of age with an average retirement pension of €1.439,11 in many cases make very little ends meet. However, most of these people have real estate assets that they can liquidate without losing the use or ownership of their homes.
It is estimated that 90% of those over 65 years of age own a home. As it is your habitual residence, the sale of the bare property is not taxed as an increase in assets. This is another reason why bare ownership sales grew and will continue to do so: these operations have excellent tax treatment.
One in four bare ownership operations was formalized in the Valencian Community
The Valencian Community was the one in which the most operations of this type were carried out last year: 461, which represents 24,9% of the national total and an increase of 21,6% over the previous year. They are followed by Andalusia communities, with 321 sales (17,4%); Madrid, with 263 sales (14,3%); Catalonia, with 212 operations (11,5%) and the Canary Islands, with 138 (7,5%).
Castilla y León was the community that grew the most in bare property sales (+72,7%), followed by Catalonia (+35%) and Cantabria. which increased its sales of bare property by 31,6%. In Madrid, operations fell 10,2% compared to 2022.
These are still low figures compared to bare property sales made in other countries, but According to studies by MAS VIDA, these types of operations, together with sales with guaranteed rent and reverse mortgages, will grow strongly this year.
Reverse mortgages will grow exponentially in the coming years
Another option to supplement retirement income without losing ownership or use of the home is apply for a reverse mortgage: According to data from the General Council of Notaries, 787 mortgages of this type were formalized in Spain during 2022, a figure that is also very low compared to other countries.
The reverse mortgage is a special loan for those over 65 years of age that allows obtaining liquidity using housing as collateral. It is a product that allows you to convert your house into a kind of pension plan, allowing you to continue enjoying your home without paying taxes on this income.
Unlike the sale of bare ownership, in the case of a reverse mortgage the ownership remains with the owner and his heirs can sell the home and cancel the debt with the bank up to one year after the death of the owner.
According to a study by the European Pensions and Property Asset Release Group (EPPARG), carried out in 13 countries including Spain, the global reverse mortgage market in Europe will exceed 45.000 billion euros in 2033, which would triple its current size. .
The study points out as an obstacle to market growth the lack of knowledge on the part of potential clients, followed by insufficient financing, especially in European markets. In Spain Santander and Mapfre have created a joint venture this year to market this product.
It is necessary to extend knowledge of this type of products to make it easier for the elderly to take advantage of their real estate assets; It is a very interesting formula so that they can obtain additional income to complement their opinion which, in addition, does not pay tax as long as the affected property is their habitual residence.
Thus, with all these factors it is normal that sales of bare property and all formulas to supplement pension income will continue to grow. In Spain there is a culture of investing in one's own home and it is logical that at a certain point those who have put their savings in bricks can enjoy that capital.
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