Bare ownership: an emerging phenomenon in Spain

It is quite likely that, if you are interested in possibilities that can supplement a meager retirement pension, you have heard about or read about bare ownership. In Spain, more and more people bet on this type of sale that in other European countries it has been solving problems of this nature for several years now.

La sale of the bare property It is an ideal product for people or couples over 65 years of age who are in a difficult financial situation and can benefit from receiving additional help for this stage of life.

In many cases, options such as nursing homes are valued. However, even receiving the maximum pension, these expenses can be difficult to face and they opt for the total sale of the house, discarding the option of being able to return one day.

In Spain, the tradition of property is firmly embedded in society and in most cases it is the legacy that is passed on to future generations. However, it must be borne in mind that the world is changing faster and faster and current lifestyles are less sedentary than a few years ago.

It is not surprising that the first thing the heirs of a property do is put it up for sale and that, on many occasions, this generate internal conflicts due to discrepancies or unequal distributions. On the other hand, the sentimental value that a home where a family has grown has on its owner can also make parting with it painful. A lifetime full of memories in the same physical space.

The usufruct, the bare owner and the full owner

 With all this in mind, the first thing that must be clear when it comes to the sale of the bare property are the three main concepts that come into play in the operation. The full owner of a property has two rights: the right to ownership of the property (bare ownership) and the right to use and enjoy it (usufruct).

This is how this possibility was born in which a buyer only acquires the ownership of the house keeping the original owner the right to use and enjoy it until the end of his days. It will not be until the death of the seller when the bare owner acquires full ownership of the property.

This means that if you become the usufructuary of your house, you will get an injection of extra liquidity and you can continue living in your home forever. As compensation, the buyer can obtain discounts ranging from 20% to 80% of the market value, depending on various factors.

As is logical, at the time of the operation it is necessary to assess the state of the property and it will be taken into account the age of the seller, since saving decreases as it is greater.

Bare property in Spain grew by 40% last year in Spain

 Let's take the case of an 85-year-old couple whose apartment was valued at €850.000, for example. After assessing the state of the home, it is normal for it to be somewhat used, but in normal conditions, and taking into account that it includes the usufruct of two people, the buyer could qualify for a discount of 20%; with which €170.000 would be saved over the market price.

As for the couple, they could receive a percentage of the proceeds from the sale and a life annuity of around €2.500 per month. In addition to this, if they decided to opt for a nursing home where they would receive more care, as we pointed out at the beginning, They would also have the possibility of renting the property by maintaining the usufruct.

Bare property buyers are often investors specialized in this type of product in the medium and long term and take into account factors such as location and the annual appreciation of your new acquisition.

It is not surprising that the numbers of seniors who opt for the sale of bare ownership are growing rapidly. In 2020, just over 1.000 agreements of this type were signed and in 2021 the figure increased by 20%. Exponentially, from 2021 to 2022 a growth of around 40% was achieved, which implies an increasingly marked increase facing this 2023.

Regarding the number of transactions carried out in each Autonomous Community during the past year, the Valencian Community stands out with 23% of the total, followed by Andalusia with almost 17.9%, Madrid with 17.3% and Catalonia with 10%. as top representatives. On the other side we have Aragón and Extremadura with 1.7%, La Rioja somewhat behind with 1.4%, Cantabria with 1.2% and, surprisingly, the Basque Country with only 0,6%.

Investors, for their part, have confirmed the good reception on the part of the Spanish territory, especially in the most important cities and in the best locations within these. As expected, Madrid has operated as one of the main nerve centers for bare property, since prices are very high and many buyers from other provinces want to acquire a property in the center of the capital.

Enjoy a well-deserved retirement by making your assets profitable

This solution is flexible and can be easily adapted to different types of personal situations. After a difficult period like the one caused by COVID-19, many older people have been pushed, in many cases by their children, to look for an alternative to be able to live better. One of the solutions chosen has been the sale of the bare property.

by the experience of Mas Vida We know that not only families with economic problems, but many clients with a high purchasing power also lean towards these products in order to enjoy their assets to the fullest.

Thanks to bare ownership, you can better enjoy a well-deserved retirement with a lifetime salary that complements your pension. From the buyer's point of view, this formula can help future projects, How to pay for good studies or ensure a good future for their children, adolescents at the time of the operation.

There are upward trends such as bare ownership or other products such as reverse mortgage that fit increasingly better in a country with one of the populations with the highest life expectancy in the world. In addition to this, Spain also stands out for its density of owners and the housing market is one of its main sources of investment.

En Mas Vida we encourage you to explore the option that best suits you and we remind you that we are at your entire disposal for any type of doubt that you want to solve or advice that you need. Our team of professionals is an expert in the real estate sector and our priority is that all parties in any operation win.