What is the bare ownership?

The bare ownership of a property is the right by which the owner of the property has the ownership, but does not have the right of usufruct over the property. Therefore, the bare owner of a property cannot fully enjoy the property until the right of usufruct is extinguished (on the death of the current owner / the Elderly Person), at which point he/she will become the full owner of the property.

What is the sale of the bare ownership?

The Sale of the bare ownership consists of the owner of a property (Elderly Person) transferring the ownership of his/her house in exchange for the payment of a lump sum and at the same time reserving the right to continue to use his/her house for as long as he/she lives.

The right of ownership of the house is broken down into two legal concepts, as explained in the following scheme.

In order to calculate the financial terms of the transaction, numerous actuarial, real estate and financial factors and parameters are taken into account, the main ones being the market value of the property and the life expectancy of the beneficiaries, following the official tables of the Directorate General of Insurance and the National Institute of Statistics.

In addition, it is necessary to take into account the value of the usufruct of the home, which would be equivalent to the total amount that over the life expectancy of the Elderly Person would represent the rent of a flat with the same characteristics and location as his/her home.

It is a product aimed at Elderly People who need to pay off a debt or who prefer to receive the entire value of the bare ownership in one go.

Modalities and types of sale of bare ownership:

  • Sale of bare ownership with Lifetime Usufruct: this is the most common type, whereby the Elderly Person reserves the use and enjoyment of his/her home forever, i.e. until his/her death.
  • Sale of the Bare ownership with Temporary Usufruct: this is an option in which the Elderly Person reserves a usufruct for a specific period (7, 10, 12, 15 years, etc.), as he/she foresee that after a specific time he/she will no longer wish to live in the property.

Advantages and Guarantees of selling the bare ownership of a property:

Formalising the sale of the bare ownership through GRUPO RETIRO has numerous advantages for the Elderly, of which we would like to highlight the following:

  1. You will stop paying forever the Property Tax, the extraordinary Community expenses and the cost of the house insurance.
  2. The sellers only have to assume the ordinary Community fees, the utility bills (electricity, water, gas, etc.) and the municipal urban waste/rubbish tax (when this is collected by the Town Hall).
  3. If you carry out the operation on your habitual residence, you will have a total exemption in the IRPF (Personal Income Tax) concerning the possible capital gain.
  4. You will not have to pay any kind of expenses, Notary fees, Land Registry and Administrator fees, or taxes (except for the Municipal Capital Gains Tax), which will be paid by the buyer/investor.
  5. Nor will you have to pay the cost of the Energy Efficiency Certificate (EEC), which will be assumed by GRUPO RETIRO.
  6. If after a while, you no longer wish to maintain the right of use and enjoyment of your home, you can rent the property or sell the right of usufruct to the bare owner. We will also be able to help you with our complementary services for the search of Nursing Homes / Centres for the Elderly, Assistance or Home Care companies, Residential Complexes or Apartments for the Elderly, Income Insurance, etc., and of course, completely free of charge.

And also with all the Legal Guarantees:

  • The formalisation of a sale of bare ownership is carried out with all the guarantees, in a Public Deed before a Notary Public and registered in the Land Registry.
  • The right of usufruct for life is included in the Deed and is not extinguished until the death of the last of the beneficiaries (in the case of married couples, siblings, etc.).
  • GRUPO RETIRO continues to provide its professional services of comprehensive and permanent advice to the Elderly until the end of the operation, that is, until the death of the last usufructuary or until he/she sells his/her right of usufruct to the bare owner if he/she considers it appropriate.

Please contact us if you have any doubts on any of the points mentioned above or if you would like to request a FREE AND NON-BINDING STUDY on your specific case.
If you prefer to sell the bare ownership of your property in exchange for monthly rent, please consult our product Real Estate Annuity.


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