Bare ownership is the right that a person has to own something, such as a house, but without the right to use or enjoy it.
Author: Editorial 05-22-2024
Source: Expansión

As explained by Adevinta, as long as the usufructuary’s right exists, there is no need to declare anything related to the property in the income tax return because they are not the holder of the real right to the property. This is because they cannot obtain profits, dividends, or income from the property of which they are the owner.

Therefore, properties in bare ownership do not generate income for the owners. That is, they do not use them nor can they rent them out. They do not need to be declared in the personal income tax (IRPF).

Impact on the income tax return: The owner does not have to do anything. However, the usufructuary agrees to receive income in exchange for bare ownership, so they must declare it in their tax return, taking into account the exceptions for elderly individuals.

Sale of a property with usufruct: In this case, the bare owner must bear the taxes related to the property: transfer tax (ITP), inheritance tax, special assessments, and community fees. In the case of property tax (IBI), an agreement can be reached.

Inheritance of these properties: In the case of inheritances, the value of the inherited property must be calculated, and the value of the usufruct subtracted. In this way, taxes need to be paid only on the remaining value.