What is bare ownership (nuda propiedad) in Spain?

The bare ownership is an increasingly common arrangement in Spain to sell —or buy— a home in which the seller continues to live in it for life. It is very present in the Valencian Community. Here I explain what it is, how it works, its advantages and its risks, and how I guide you through the process.

What is bare ownership?

Ownership of a home can be separated into two rights: the bare ownership (the ownership, which is acquired by the buyer or investor) and the usufruct (The right to use and live in the house, which is retained by the seller, usually life). When the usufruct extinguishes —when the usufructuary dies—, the proprietary knot has the full property without paying anything else.

How does the operation work, step by step?

• Rating of the home at market price.
• Calculation of the discount according to the seller’s age: the older the older, the lower the discount (the usufruct lasts less).
• Signs notary of the sale of the bare ownership.
• The seller receives the money and continues to live in his house for life.
• The buyer gets the full ownership when the usufruct is extinguished.

Advantages for those who sell (over 65)

• IMMEDIATE LIQUIDITY WITHOUT LEAVE YOUR HOME.
• Keep living on your home for life.
• A good pension complement.
• No mortgages or debts: Have the money as you like.

Advantages for the buyer (investor)

• Purchase with discounts of 30% to 50% on the market value.
• Investment Long-term patrimonial.
• No tenant management or rental expenses.

Taxes and legal aspects

The seller can be taxed in personal income tax for the patrimonial gain, with a Possible waiver if you are older than 65 and is your usual home. The buyer Pay the property transfer tax (ITP) on the value of the bare ownership. Every operation is signed before notary. I always recommend having a tax advisor and notary: this information is indicative and does not replace professional advice. If you are planning this stage, you may be interested in the guide to Retire on the Costa Blanca.

The bare ownership on the Costa Blanca

The Comunitat Valenciana is the community with the most operations of bare ownership in Spain. In the Costa Blanca, with a large population of older owners —Spanish and foreigners—, it is an arrangement in high demand both by those seeking liquidity and by investors. As estate agent in the Costa Blanca, I guide you throughout the process, in Spanish, English or French.

Frequently Asked Questions

Can I continue living in my house if I sell the bare ownership?

Yes. It retains the lifetime usufruct, that is, the right to live in its home for life.

What about my heirs?

The usufruct is extinguished when the usufructuary dies and the home passes to the buyer; The heirs do not receive that property, that is why it is convenient to speak it as a family.

How much discount does the bare ownership have?

Normally between 30% and 50% on the market value, depending on the seller’s age and the value of the home.

Is it a safe operation?

Yes, it is formalized before notary and is registered in the Property Registry.

Are we talking about your case?

Whether you want to sell your bare ownership and get liquidity, or if you are looking for invest, I advise you without obligation.