This is the Company / Investment Group or individual Investor who formalises the operation as the purchaser of the bare property and who is obliged in the Deed to pay the expenses and taxes that are linked to the bare ownership of the property (Property Tax, extraordinary Community expenses and insurance of the premises of the property).
This is the public deed that is signed before a Notary Public and in which all the legal and economic conditions that the parties agree on in the contracting of this product are contemplated.
The Life Expectancy of a Person is determined under age and sex, based on what is established in the official Tables published for this purpose by the National Institute of Statistics and the Directorate General of Insurance. Together with the value of the property, it is one of the fundamental data for the calculation of the economic conditions of the bare ownership sale.
The sale of the bare ownership has unbeatable tax conditions. The transfer of the bare ownership of the main residences belonging to people over 65 years of age is exempt from taxation in the Personal Income Tax (IRPF, in Spanish).
These are the Taxes and Expenses that any property generates, both for its ownership and its use (usufruct), when contracting the Bare Ownership Sale, the distribution of these concepts between the buyer and the Elderly Person is as follows:
– The Buyer assumes the concepts that are inherent to the bare ownership of the property, that is to say, the Property Tax, the extraordinary Community expenses and the premises insurance of the property.
– The Elderly Person will continue to pay the expenses that correspond to the use of the property such as the ordinary community fee (which involves the porter’s lodge, central heating, lift, light in the entrance hall and staircase, water, etc.), the Urban Waste Tax and the contents and civil liability insurance.
These are those Expenses (Notary and Land Registry fees) and Taxes (Tax on Property Transfers and the Municipal Capital Gains Tax), which arise with the formalisation of the Bare Ownership Sale. All these costs are borne by the buyer, except for the Municipal Capital Gains Tax, which is borne by the Elderly Person, as the seller of the property.
The full ownership of a property is made up of two rights: the bare ownership and the usufruct. When an Elderly Person sells the bare ownership of his or her home, the buyer acquires this right and is therefore limited as owner by the rights inherent to the use and enjoyment reserved by the Elderly Person. At the end of the transaction, the bare owner automatically becomes the full owner of the property, as the usufruct for life is consolidated with the bare ownership as a result of the death of the Elderly Person.
It is the official body where the operation is registered, with the new holder of the bare ownership being expressly recorded. On the other hand, the Elderly Person will continue to be recorded in the Property Register as the holder of 100% of the usufruct of the property.
This is the right to use and enjoyment of the home of which the Elderly Person continues to be the owner for as long as he/she lives. This right allows the Elderly Person to continue using the home under the same conditions as when he/she was the sole owner.
In addition, the Elderly Person can voluntarily and at any time he/she wishes, transfer this right of usufruct to the bare owner, thus obtaining an additional amount as a one-off payment. This possibility is used by those who wish at some point to leave their home to move to a nursing home or any other address.