La bare ownership It is a legal concept that allows a person (the bare owner) to be the owner of an asset without having the right to its use and enjoyment, which corresponds to the usufructuary.
That is to say, the right of ownership is “naked” of its practical utility while the usufruct exists.
This concept is key to understanding transactions such as selling a home while maintaining the right to reside there.
Table of Contents
What is full ownership?
But before talking about bare ownership, it's important to understand other concepts. What is full ownership of a home? Full ownership means having the full ownership of a particular assetWhen you carry out a normal property purchase and sale, you are selling the full ownership of the property.
But what is not usually known is that this full ownership is divided into two parts:
- Bare property
- Usufruct
Bare ownership and usufruct are different rights, they can belong to different people, even if they fall on the same asset. So, full ownership on a good there will be cWhen usufruct and bare ownership coincide in the same person.
The bare owner is the owner or holder of an asset, although another person may have a usufruct right over it. Even if they are the owner, if they do not have the usufruct, their ownership right is "void." since the right to use and benefit from the property belongs to the usufructuary and not the bare owner.
What is usufruct?
El usufruct It is a right that allows a person to enjoy and live in a home without being the owner of the property (what is known as Bare Ownership).
According to of the Civil Code “Usufruct gives the right to enjoy the property of others.” The holder of the usufruct, who is known as usufructuary, "you have the right to receive all the natural, industrial and civil fruits” of the thing (Article 471); and since we are talking about a right over real estate, it is the usufructuary who can fully enjoy the use of it.
The fact that these two concepts can be separated is what legally allows them to be sold separately. sale of the bare property Maintaining the usufruct is an option that has been gaining more followers in Spain since 2018 and which has led to the fact that in recent years bare ownership sales in our country will skyrocket.
Can usufruct be transferred?
The usufruct of an asset can be transferred in several ways:
- By inheritance, a testator leaves the property to one person and the usufruct to another or, even, the Law gives the legitimate interest to the spouse over the usufruct of assets and this will happen in non-testament succession.
- By sale: the owner or another person who already has the usufruct can sell it.
Depending on how and why it has appeared, usufruct has a fixed duration, it can have a specific duration specified (always before a notary) from date to date or conditioned to the occurrence of some event whose date is unknown.
Also can be for life, that is, that the usufruct will continue to exist as long as one person lives (or as long as several people live).
What the bare owner can do is transfer ownership of the property (we will talk about real estate later) or even use it as a mortgage guarantee in some cases.
And, of course, once the usufruct rights of the other person come to their conclusion, then the bare owner becomes the full owner and therefore can begin to use and enjoy the property.
Free Valuation of the Bare Property of your Property
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Differences between bare ownership, full ownership and usufruct
Although we have already addressed the Differences between bare ownership and usufruct in another post, we list some of the differences between these three concepts to make everything clearer.
- The bare owner is the legal owner of the property but does not have the use and enjoyment of it until the end of the Usufruct.
- The usufructuary has the use and enjoyment of the property but does not own the property.
- The bare owner will only be able to enjoy the house when the usufruct ends.
- The bare owner cannot rent the house, but can sell the bare property to a third party under the exact same terms as agreed on day one.
- The usufructuary can rent the house and obtain an income. They can also sell the usufruct to a third party.
- The usufructuary may enjoy the dwelling for the duration of his Usufruct rights.
- Full ownership occurs when both rights (bare ownership and usufruct) coincide in a single person.
How is bare ownership acquired?
Bare ownership can be acquired through various means, all of which are legally recognized and each has different implications for the owner, the usufructuary, and potential heirs. The three most common methods of acquiring it are explained below:
Acquisition by inheritance
One of the most common forms of acquiring bare ownership is through an inheritanceThis occurs when, by testamentary disposition or legal succession, the heirs receive bare ownership of an asset, but the usufruct is reserved for the surviving spouse.
This distribution complies with the provisions of the Civil Code, which guarantees the surviving spouse the right to usufruct over part of the inheritance. Thus, the children (or legal heirs) become bare owners, but cannot use or enjoy the property until the usufruct expires, usually upon the death of the usufructuary.
This scenario is very common in real estate inheritances, as it allows the family home to be protected while ensuring the gradual transfer of assets to descendants.
Acquisition by donation with reservation of usufruct
Another common way to acquire bare ownership is through an inter vivos donation, in which the owner of the property (usually an older person) transfers the bare ownership to a third party—generally a child or close relative—but reserves the life usufruct of the property.
This type of transaction offers tax and property advantages for both parties. The donee (who receives the bare ownership) can benefit from a lower acquisition value than the full ownership, and the donor (who retains the usufruct) retains the right to live in or rent the property for their lifetime.
This is a common formula in estate planning, allowing for anticipation of inheritances without giving up the use of the assets during the donor's lifetime.
Acquisition by sale of bare ownership
With the sale of the Bare Property, the owner of a home, usually over 65 years of age, transfers the ownership of the house in exchange for a one-time payment upon formalizing the transaction and maintains the right to continue using and enjoying his or her home for life.
This allows the seller to continue living the same life as before and also to receive an instant and one-time payment, which can be used to pay off a debt, to enjoy with the family, take trips, etc.
When does the bare owner obtain the use and enjoyment of the bare ownership?
Having defined full ownership, we can say that it is established when ownership and use and enjoyment are combined in the same person. The consolidation of full ownership will occur in the person of the bare owner for one of two reasons: sale or termination of usufruct.
The sale of usufruct
If the usufructuary decides to sell his or her usufruct right, it is most common to sell it to the bare owner. After acquiring this right, the owner gets freehold (ownership, use and enjoyment of the property).
The extinction of the usufruct
- Termination of usufruct due to the expiration of the term for which it was established (in the case of temporary usufruct)In the event of the death of the usufructuary before the stipulated term, the use of the usufruct will also pass to the bare owner, unless otherwise agreed.
- Termination of usufruct due to the death of the usufructuary (in the case of Usufruct for life)When the usufructuary dies, the enjoyment, use and possession of the usufructed property passes to the bare owner.
If the usufruct corresponds to several persons in undivided (refers to the situation of a thing or right that belongs to several people in common, without there being separate parties to each of the owners or holders of the right) the bare owner does not receive full ownership until the death of all the usufructuaries.
Rights of the owner
- Property rights: the bare owner retains ownership of the property, even though he does not have the right to use and enjoy it.
- Right to be restored the use and enjoymentthe bare owner will obtain the use and enjoyment of the property once the usufruct is finished (usually because the Usufructee has died or gone in to permanent Spanish healthcare), consolidating full ownership in his person.
- Right to mortgage bare property: the bare owner may request a mortgage loan on the bare ownership of real estate, even if he does not have his usufruct. Although it is true that currently conventional financial institutions are not granting mortgage loans on a bare property.
- Right to carry out works and improvements: the bare owner will have the right to carry out works and improvements in the usufructuated property, as long as the usufructuary is not harmed by them.
- Right to sell bare property: the bare owner may sell the bare property to a third party as long as the rights of the usufructuary are respected. Although the owner changes, the usufructuary will continue to have the use and enjoyment of the asset.
Obligations of the owner
- Take charge of building repair: the bare owner will have to take charge of the payment of the extraordinary repairs of the property usually by an Insurance policy.
- Respect the right of the usufructuary: the bare owner may not, in any case, make alterations to the property that harm the usufructuary.
- Take over the mortgage: in the event that when the usufruct of the property is constituted, it is mortgaged, it will be the obligation of the bare owner to pay the corresponding installments.
What is the tax treatment of bare ownership?
In the field of taxes, Spanish legislation regulates how bare property should be valued. This is regulated in Spanish national law (Law 29/1987, of December 18) in its article 26.
The value of the bare property will be the value of an asset subtracting the value of the usufruct which is what said article 26 says. If the usufruct is temporary, it will be worth 2% for each year of its duration remaining, without exceeding 70%.
If the usufruct is for life, it will be worth:
- 70% of the total value while the usufructuary is less than 20 years old.
- As of the usufructuary's 20th birthday, 70% will be removed from this 1% for each year over 20 that the usufructuary has, with a minimum limit of 10%.
Advantages of bare ownership for the seller
After learning about the rights and obligations of the bare owner, it is easy to draw conclusions about the advantagesof a bare property sale for the seller.
Furthermore, as we've already pointed out, these increase as the seller's age increases. Among the many existing ones, we highlight:
Formalization costs: the seller only pays the municipal capital gains tax
The seller will not have to pay any expenses related to the Notary, the Property Registry and the Agency. All taxes derived from the operation will be assumed by the buyer, except for the Plus Valia Tax, which will be assumed by the seller. This is typically hundreds of euros not thousands.
Expenses attributable after the sale of the bare ownership
The usufructuary will permanently stop paying property tax, community assessments, and building insurance. They will only have to pay ordinary community fees, utility bills (water, electricity, etc.), and the municipal garbage tax.
Does the sale of bare ownership have legal guarantees?
The sale of bare ownership is guaranteed by all legal guarantees, as it is formalized before a notary public and registered in the Property Registry.
Can the usufructuary rent the property or sell the usufruct?
The usufruct holder has the right to rent the property or sell the usufruct.
Do you have to pay taxes on the sale of bare ownership?
If the usufructuary is over 65 years of age and the property being sold is his or her habitual residence, he or she is 100% exempt in the income statement. That is, you do not have to pay taxes to the Treasury.
In the case of the sale of bare ownership of second homes, these are subject to tax in the income tax return, unless the proceeds from the sale are used for annuity insurance.
Do bare ownership taxes apply to personal income tax? How is bare ownership included in income tax?
The truth is that a property over which you have bare ownership does not generate any type of taxation in the income statement. Who enjoys ownership of the property, the usufructuary, is the one who can rent the flat and obtain income from it.
The bare owner must include the real estate in the income tax return and indicate in the property key that they hold the bare property, but not the usufruct.
How is the economic value of the bare ownership of my home calculated?
How much money can be obtained from the sale of bare property? at the time of calculate the sale price of the bare property it is necessary to estimate the life expectancy of the holder. The greater his life expectancy, the less economic value this right will have, and vice versa.
The reason is that the buyer will not be able to use or enjoy the property until the time of death. It is for this reason that we have placed so much emphasis on the orientation of this modality to the Elderly, since they are usually the main beneficiaries of this operation:
- On the one hand, it is a demographic group that generally owns some real estate. It is common that they are at least the owners of the real estate in which they live.
- On the other hand, since their life expectancy is shorter, so will be the discount applied to the sale price. So, the older the seller, the more money they will get for the sale of the bare property.
Below is a link to the real estate annuity calculator where approximate data is obtained on the monthly amount obtained from the sale of the bare property, depending on the age and gender of the usufructuary.
What can the money from the sale of the bare ownership be used for?
People over 65 can use the sale of bare ownership for many reasons, all of which improve their quality of life:
- Get out of debt of credit cards, loans or mortgages that can generate a large financial burden.
- Help your children or grandchildren to pay the deposit on an apartment, since access to the real estate market can be complicated for young people.
- Acquiring a second residence to make that dream come true and enjoy getaways to your vacation home.
- Retirement is the ideal time to enjoy life and meet the world: take a dream trip, travel to different countries, take a cruise, etc.
- If the house they live in needs renovations to better adapt to your needs, this money can be invested in improving it.
- Buying a car, a motorcycle or even a boat and maintain their independence in terms of mobility.
- With the sale of the bare ownership you can obtain the initial capital for help children start a business.
- The sale of the bare ownership can be used to access the best private hospital care.
- Many older people need home help from a person on a daily basis and in some cases the children do not have financial resources.
- Live more comfortably: improve your quality of life without financial worries.
Maximize your assets and preserve your home
Practical cases: Tax calculation of bare property and usufruct
Example of sale of bare property with 57 years
Let's imagine that Carmen, a 57-year-old woman, needs income and decides to sell the bare ownership of her home, reserving the usufruct for life. The house is valued at €260.000.
To calculate the value of the usufruct we must:
- Subtract Maria's age from 89. 89 – 57 = 32.
- Calculate 32% of the total value (€260.000).
- We obtain, therefore, that the value of the usufruct is €83.200.
What, therefore, will be the tax value of the bare ownership of your home. To calculate it, all we have to do is subtract the value of the usufruct (€260.000) from the value of the home (€83.200). We will obtain a result of €176.800.
Example of sale of bare property with 80 years
Ricardo, an 80-year-old man, needs to enter a residence. However, he does not have enough income to do so.
The sale of the naked ownership of his home, valued at €160.000, is proposed.
To calculate the fiscal value of the usufruct we will repeat the previous operation:
- 89 (life expectancy) – 80 (years) = 9% (discount).
- As we have determined, the minimum discount in these cases is 10%, therefore, we will apply this figure.
- 10% of €160.000 (house price) = €16.000 (usufruct price).
- €160.000 (price of the house) – €16.000 (price of the usufruct) = €144.000 (price of the bare property).
Last example: temporary usufruct
We have already seen how lifetime usufructs affect certain scenarios. So we are going to offer one last example, to show how the temporary usufruct is calculated.
Again, let's imagine a character, Laura, who wants to go live in Madrid.
To pay the down payment on her new home, she plans to sell the current one, which she owns. However, she is in the middle of an important work project that has two years left and that will force him to return almost daily to his current location, Barcelona.
So, after conducting research, Laura decides to sell her home, reserving a two-year usufruct. In this case, the value of the usufruct will be 2% per year of duration (i.e., 4%). If Laura's home is appraised at €320.000, the value of the usufruct will be €12.800. Therefore, the tax value of the bare ownership will be €307.200.
Conclusions
Bare ownership + usufruct = full ownership
In summary, Bare ownership, along with usufruct, is one of the components of full ownership or full domain.. Therefore, whoever owns the bare property will have the deeds, but no rights to use and enjoy the asset.
However, at the time the usufruct is over, (for whatever reason), the bare owner will recover this power, thus becoming full owner.
If you are interested in this concept or have any questions, you can visit our FAQ on our sale of the bare property or you can contact us directly in contact ussince, at Mas Vida, are the market leading specialists in this type of operation.
Download the bare ownership guide
In which cities do bare ownership and what is the minimum appraisal value of the home?
regards
Good morning: I would like to explain my situation. I am 69 years old and my wife is 66. We own a detached house, a "Montañesa" style, with a living area and a commercial space, a restaurant, which is currently rented out. Our intention is to pay off the mortgage.
Could we get -opt for La Nuda Propiedad?
Thanks a greeting.
Hello Antonio,
Yes you can. You can contact us by calling 910 413 840 or by writing to info@aunmasvida.es. We only need the exact address and we will be able to make an accurate assessment. We will be happy to help you.
Hello. If in a forced expropriation procedure a property of which I have bare ownership and my mother has lifetime usufruct is expropriated, how is the capital gain taxed in Personal Income Tax of both, when the compensation for the fair price is recognized?
Hello Alberto. We can provide you with more information privately. Contact us by calling this number: 606 900 730
Greetings and thank you.
Hello, my father has passed away and I need time to empty the house of memories, how much time do I have? Thank you.
Hi Javier,
In contracts that are signed with the advice of mas vida a period of time is stipulated that ranges from 30 to 45 years.
For any questions, please contact us through the following channels and we will keep you informed:
Phone: 910 413 840
Email: info@aunmasvida.es
Hello. Mother and son sell their home: The mother is a usufructuary and is a tax resident. The son is a Non-Resident and has bare ownership. When selling: Is it necessary to withhold 3% of the sale price from the child as NON-RESIDENT INCOME TAX? or not having full ownership is not necessary? . Thanks.
Hello Maria, thank you for your message.
Even if the child only holds bare ownership, he or she is obliged to withhold for non-resident income tax.
If you need more information you can contact us through the following ways:
Phone: 910 413 840
Email: info@aunmasvida.es
Will this work for property in the UK
Hi,
1) How is, or, who makes the initial house valuation before calculations.
2) What additional costs are incurred by the seller (admin etc).
3) If bare owner becomes bankrupt are sellers rights still guaranteed?
Thank you Anne-Marie
I am thinking about equity release my home is worth €100,000
I own an apartment in Benahavis. Value 375k. No mortgage. My age is 71. I would like to receive a cash sum and continue to live in an apartment
Hello, I would like to find out about... if I have to make a declaration to the Treasury for selling my home in bare ownership and being over 65 years of age
Hello Mari Carmen, thank you for contacting us.
You should make the income statement and report the sale. The good thing is that in the event that you carry out the operation on your habitual residence, you would not have to pay taxes to the Treasury.
If it's okay with you, you can contact us through the following ways for more information about the process:
Phone: 910 413 840
Email: info@aunmasvida.es
Widow usufructuary and sons who are owners sell rustic farms to a third party, who declare the increase in income for 2022.
Good morning,
Those who have to declare the sale in the income statement are both the bare owners and the usufructuary.
If you have more questions, you can contact us through the following ways for more information about the process:
Phone: 910 413 840
Email: info@aunmasvida.es
Regarding the case of Jose Maria, since mine is the same, how many days would be included in the rent that the property has been available to the bare owner? Only 1 because the same day that the property is sold is the day in which the usufruct is extinguished?
Hello Amparo,
We lack data to be able to answer this question. Please contact us through one of the following ways in order to advise you correctly:
Phone: 910 413 840
Email: info@aunmasvida.es
Hello, if I own the Nuda property of a farm, I know that I do not have to declare it for rent, but in the declaration of assets I do have to detail it?
Hello,
I tell my case to see if you can help me. In my case, when my father died, the house was divided like this: my mother has an undivided half in full ownership and an undivided sixth part in usufruct and I an undivided third part in full ownership and an undivided sixth part in bare ownership. In this case, if the house wanted to be sold, what percentage of the house would be mine? That is, what percentage of the sale would be for me. Mine would only be the undivided part or also the bare ownership?
Thank you.
A greeting.
Hello Noelia. Effectively, it would correspond to you to collect the undivided third part of the full ownership and the undivided sixth part of the bare ownership.
If you have more questions or want more information, do not hesitate to contact us: Telephone: 910 413 840
Email: info@aunmasvida.es
Good afternoon, I do not understand this part very well: RENT AND SALE OF THE USUFRUCT
The usufruct holder has the right to rent the property or sell the usufruct.
Does this mean, in the hypothetical case, that the seller of the bare property could transfer the usufruct to his daughter and the buyer of the house could not enjoy the property until the extinction of the usufruct? What kind of guarantees are given to the buyer so that this does not happen and buy a home that he will not be able to enjoy?
Hello John. If the usufructuary sells the usufruct after the sale of the bare ownership, the extinction of the usufruct is always subject to the age of the first usufructuary, not the second.
If you have more questions or want more information, do not hesitate to contact us:
Phone: 910 413 840
Email: info@aunmasvida.es
Due to non-payment of a debt and the bare ownership of a house being as collateral before a notary public, I have to hand it over to a third party
As income taxes the delivery of that bare property
Thank you
Good morning Marta,
your repercussion in rent would be for the profit that in theory you were generating to the operation. In other words, in this specific case, the tax will be based on the difference between the reference value of the bare ownership of the property today and the value at which you acquired the property in public deed.
If you want us to help you with the specific calculation please write us through info@aunmasvida.es.
Hello, good afternoon, my father died and it seems to me in the rent that I am the bare owner and they denied me the university scholarship for having that as assets. My question is if I have not taken any money, my mother is the one who lives in the house What I can do
Hello Monica.
For this specific case, we ask you to contact us as we need more information to analyze the situation.
You can call directly at 606 900 730. We will be happy to assist you, thank you!
Good morning. I am interested in the /Nude property/ Sale of apartment
I would like information
Thank you
Good morning.
I am a 74-year-old person from Madrid... with the minimum non-contributory pension and my habitual residence as my only property.
If I sell the bare property, would I have to pay the municipal capital gain?
I'm reading articles about this on the internet... and it's quite confusing. In some places I read that it is and in others that it isn't.
Thanks for your help.
Hello Antonio.
Indeed, you would have to assume the Municipal Capital Gains if you sell the bare property. If you want more information, do not hesitate to contact us: 910 413 840
Hello, I was the bare owner when my mother died, I am the full owner. When I sold it, what value did my father and mother's ISD take at 50, or the value of my mother's ISD? And the date would be the date of my mother's death. , the usufructuary?, or would it be two parts, one of the bare property of my father and the rest of my mother?, thank you
Hello. We need more information to be able to provide a solution. Contact this number and we will be happy to help you: 606 900 730
Greetings and thank you.
Good morning.
My father died in 2003 and I have the bare ownership and usufruct of my mother, who in turn died in 2016.
In 2023 I sold the urban land.
What coefficient would be applied to the capital gain at 19 years (since 2003) or at 7 years, which is when ownership is consolidated due to the death of my mother.
Thank you.
Hello Francisco,
This will depend on whether it was a community property or whether each of your parents had an undivided share in the land.
If it was a community asset, then the Capital Gain would be calculated based on 7 years, which is when you consolidate ownership.
If it was an undivided 50% of each of your parents, then half of the Capital Gain would be calculated over 19 years and the other half over 7 years.
If you have any other questions you can contact us through the following means:
Phone: 910 413 840
Email: info@aunmasvida.es
Our team will be happy to assist you. Thank you so much!
Good evening,
für die Garage meines Hauses welches ich vor 3 Jahren gekauft habe wurde an den damaligen Eigentümer des Nachbarhauses 1999 ein Nutzungsrecht eingetragen. Inzwischen gibt es einen neuen Eigentümer der das Haus nun verkaufen möchte und laut Anzeige meinen Raum mit anbietet. Laut Kataster und writing ist die Garage, die zwischenzeitlich zum Wohnraum umgebaut wurde, nach wie vor mein Eigentum. Erlischt das Nutzungsrecht nach Verkauf des Nachbarhauses? The Eigentümer der jetzt verkaufen will be nicht der mit Titel des Nutzungsrechtes. Habe ich wieder Anspruch? Vielen Dank
Guten Tag Frau Schwass, das Nutzungsrecht kann man verkaufen, aber dies hält nur solange die Person dieses als erste hatte ( oder die Personen, falls es ein Ehepaar war) noch leben. Sollten diese tot sein, dann würde dieses Recht nicht mehr gelten und es wäre Ihrs. With best Grüßen
Good morning. I would like to know if you work in the Toledo area and surrounding areas. Thank you.
Hi Jesus, we do indeed work all over Spain. Since Mas Vida We can help you by offering a free assessment. You can contact us through the following channels and we will keep you informed:
Phone: 910 413 840
Email: info@aunmasvida.es
Hello,
My father passed away and my brother and I each inherit 8,33% of the property in the house and 8,33% in bare ownership (each).
Now we are going to sell that house and we don't know if the 8,33% of bare ownership that my brother and I have should be collected by us or by my mother since she has the usufruct of that percentage. What percentage should each of us collect?
Thank you very much for your reply.
Hi Isabel,
Thank you for contacting us. In relation to your query, you should bear in mind that the part corresponding to the bare ownership (that 8,33% of each) corresponds to you and your brother, while the usufruct of that same percentage corresponds to your mother. If what you intend is to sell the entire property, we understand that your mother would also be willing to sell her usufruct rights.
If you wish, we can help you with the management of the sale so that everything is carried out correctly and without complications. Do you already have an interested buyer or are you still looking?
We remain at your disposal for any other questions or to support you in the sales process.
Phone: 910 413 840
Email: info@aunmasvida.es
I am 67 years old and have a country house in the Canary Islands for which I pay a mortgage.
Is it possible to carry out the bare ownership option?
Good morning,
Of course, without any problem, as long as the amount of the bare ownership is high enough to pay off the outstanding mortgage. The mortgage cancellation act is done on the same day of the signing of the bare ownership and has costs that are assumed by the seller (600-800€).
For any questions or to obtain a free evaluation, please do not hesitate to contact us:
Phone: 910 413 840
Email: info@aunmasvida.es
I need to clarify a doubt. My sister and I have inherited a legacy of a property, the bare ownership and my sister-in-law the life usufruct. Could my sister and I sell the bare ownership to whomever we want? And would the usufructuary have to give his consent?
Hi Charo,
Yes, they can sell without consent, but it is recommended that the usufructuary be aware of this, because it is better to make visits with investors to obtain a higher price. Ask them if the property can be visited and if your sister-in-law usually lives there.
Greetings and for any questions, please contact us directly:
Phone: 910 413 840
Email: info@aunmasvida.es
Hello, I want to sell the bare ownership to a friend's children. I'm 82 years old and the property is valued at 100.000 euros, but I want to sell it to them at a better price. Would it be legal to sell it to them for 50.000 euros?
Hello Concha, it can be sold at whatever price she wants, from Mas Vida We recommend selling it for €58.000, and we'll be happy to help you sell it. It's important to emphasize that buyers will likely pay taxes on the reference value (with a discount applied) since it's bare ownership.
Greetings and for any questions, please contact us directly:
Phone: 910 413 840
Email: info@aunmasvida.es