Full ownership of a property is divided into usufruct and bare ownership, and you can sell the bare ownership of the property while retaining the usufruct.

Author: Mónica G. Moreno

Source: El Economista

Full ownership of a property is divided into two concepts: usufruct, which grants the right to use, and bare ownership, which is the mere title to the property—essentially, ownership without the right to use it. But is it possible to sell your house and continue living in it? The answer is yes.

One who decides to sell the bare ownership of a property can retain the usufruct, allowing them to continue living in the property until their death or according to what is stipulated in the contract. Thus, the bare owner will be able to enjoy the property once the usufruct ends.

This option, according to some experts, is increasingly in demand among retirees, as it can provide extra income to supplement their pension in exchange for selling the property while still living in it.

“More and more people over 60 are choosing to sell their home without giving up living in it forever and obtaining additional income to supplement their pension,” explains Eduardo Molet, a real estate consultant, who adds that “seniors are monetizing their homes to obtain liquidity from the savings they have invested in their property throughout their lives.”

However, it can also be useful for other types of property owners who, in “times of crisis, choose to maintain temporary usufruct and sell the bare ownership, waiting for more prosperous times,” say experts from Tecnitasa.

Shared Expenses

The seller of the bare ownership, who retains usufruct, will be responsible for the usual expenses of the property, such as water, electricity, or gas, and maintenance costs. The community fees and the Property Tax (IBI) -which is paid annually- will also be part of the payments for the person enjoying the use of the property.

On the other hand, the buyer of the bare ownership will handle extraordinary expenses that arise in the property. Regarding home insurance, both parties, the buyer and the seller, must cover it. The usufructuary (seller) will need to contract a service to protect the contents, while the buyer should pay for insurance related to the structure.

When selling the bare ownership, there are two payment options: either receive the full amount in a single payment or in the form of monthly rent.

In this regard, Abel Marín Riaguas, lawyer and partner at Marín & Mateo Abogados and author of the book Protect Your Inheritance, highlights the importance of considering the effect of inflation for the seller of the bare ownership, noting that “if receiving a fractioned payment monthly, one must account for possible significant inflationary movements, as we are seeing now, and this needs to be calculated,” recommending that “these types of transactions be signed with the assistance of a specialized lawyer.”

How Much Could Property Owners Receive for Selling the Bare Ownership?

Tecnitasa provides an overview of the value of bare ownership by autonomous communities, revealing that one can receive between 35% and 95% of the property’s appraised value depending on the age range.

According to the company’s valuation study, the amount of the bare ownership depends on the duration of the usufruct, the age, and the number of usufructuaries. The data are estimated based on a maximum and minimum amount the owner would receive, across age ranges from 65 to 95 years old -with the average life expectancy in Spain at 83.07 years according to data from the National Statistics Institute (INE)-, across three property value ranges, and in different provinces of the country.

Major Markets

According to Tecnitasa’s data, in the province of Madrid, with an average property value of 348,000 euros, a 65-year-old could receive up to 270,500 euros—representing 78% of the property’s original value. If the usufructuary is 85 years old, the amount received could rise to 322,700 euros (92.73% of the total property value), and if they were 95 years old, they would receive 333,200 euros (95.75%).

In Barcelona, as shown by the company’s example, for a property worth 301,000 euros, a 65-year-old owner would receive up to 232,400 euros (77.21%). This percentage would rise to nearly 93% of the property’s value if the usufructuary were 85 years old (receiving a maximum of 278,600 euros), and up to 287,900 euros if they were over 95 years old, representing 95.65% of the value.

In Valencia, with an average property value of 156,000 euros, a seller of the bare ownership at 65 could receive up to 72.76% of the total value of the property, which is 113,500 euros. If they were between 85 and 89 years old, this amount could exceed 142,000 euros (91%), and at 95 years old, it could reach 147,900 euros, representing 94.8% of the total value of the property.

In the Balearic Islands, a seller of bare ownership aged 65 to 69 could receive up to 244,600 euros if the property’s value is around 316,000 euros, whereas if they were 85 years old, the amount would increase to 292,700 euros.

In the province of Málaga, the amounts for selling the bare ownership of a property with an average value of 242,000 euros would range from a minimum of 106,700 euros to a maximum of 184,400 euros for a usufructuary aged between 65 and 69 years old—representing between 44% and 76% of the property’s value. At 85 years old, the amounts would range from a minimum of 169,400 euros to a maximum of 223,200 euros.

These figures show that, taking the intermediate property value scenario with a single usufructuary, a person aged between 65 and 69 could sell the bare ownership for about 70% of their property’s value. However, at an age close to 95, the amount received would be around 95% of the appraised value or higher, according to Tecnitasa’s study.

Considering higher-value properties, for a house worth 585,000 euros in Madrid, the seller could achieve between 462,400 euros and 561,500 euros if they are 95 years old. With the same age, an owner in Barcelona with a property valued over 500,000 euros could obtain a maximum amount of 485,500 euros, translating to 95.85% of the property’s total value.

Other Markets

In provinces with lower-valued homes, such as Ciudad Real, a 65-year-old with a property valued at 88,000 euros—considering an intermediate valuation example—would receive up to 56,800 euros, while at 95 years old, the amount would rise to 82,000 euros, representing 93% of the total property value.

The study’s figures show that a usufructuary up to 69 years old in the province of Teruel could receive up to 59,300 euros for selling the bare ownership of a property worth 92,000 euros. For those aged between 85 and 89, the amount could reach 77,800 euros, and at 95 years old, up to 82,000 euros.

In Zamora, for instance, a 65-year-old would receive 60,600 euros (64.47%) for selling the bare ownership of a property valued at 94,000 euros, and up to 87,600 euros if they are 95 years old (93.19%).

“The differences in the final amount received are more pronounced depending on the age of the seller. Obviously, older sellers receive a higher amount, but with the variable of, presumably, less time to enjoy the property. Similarly, the amount decreases if the number of usufructuaries increases and if the usufruct is temporary or lifetime, until the usufructuary’s death,” says the valuation company.