Note

Usufruct in Spain: bare ownership and the right to use

§ 1The idea

A usufruct is a right to use another person’s property and to take its fruits, such as the rent, without owning it. The person with the right is the usufructuary. The person who holds the title is the bare owner. Usually the usufruct ends at death or after a set term, and the bare owner then holds full ownership. The idea is old, and Spain uses it in family planning and in some sales. This page belongs to the chapter on what to know about ownership structures.

§ 2Where it appears

Parents may give their children the bare ownership of a home and keep the usufruct for life. A will may leave the usufruct to a surviving spouse and the bare ownership to the children. A seller may sell the bare ownership and keep the right to live in the home. These uses are common, and each leaves the buyer or heir with a right that is not yet fully usable. Check the section on succession in the legal part for the rules of inheritance.

§ 3What each side can do

The usufructuary can use the home, and can generally let it and keep the rent, subject to the terms of the right. The bare owner holds title and can generally sell the bare ownership, but not use the home meanwhile. Both have duties, such as who pays for repairs, the local property tax and insurance. We could not read the civil code articles that set the duties and the limits, so the split should be written into the deed, and your lawyer should explain it.

§ 4Buying bare ownership

A buyer of the bare ownership pays less because the right to use is deferred. The risk is that the usufructuary may live a long time, and you cannot use the home. If you buy, ask for the registry note, the deed of the usufruct, the age and health context in a general way, and the costs due during the usufruct. Compare with the plain price of a home. The rules on joint ownership explains what to settle when several people are involved.

§ 5Tax

The tax treatment depends on the case. The tax office applies a rule on the sale of the habitual home by people over a set age, which includes the transfer of bare ownership with a lifetime usufruct reserved, as the capital gains section explains. Inheritance and gift taxes follow their own rules, which differ by region, and the costs section explains them. Ask a tax adviser to model the case in Spain and in your home country.

§ 6Selling

A property subject to a usufruct can be sold with the right in place, or the parties can agree to sell the whole. Everyone with a right must agree to sell the whole. the chapter on selling explains the steps of a sale.

§ 7Registry

Check that the usufruct is recorded. An unrecorded right can cause disputes. The legal section explains the registry note.

§ 8What we could not verify

We did not read the civil code articles on usufruct, so we cannot state how it ends, what repairs it requires or how it is valued. Ask your lawyer in writing.

§ 9More on this topic

The rules on freehold or leasehold explains why freehold and leasehold do not map neatly onto Spain and the rules on shared ownership explains whether shared ownership schemes exist in Spain and what to check.

The rules on timeshare explains the Spanish timeshare law and the buyer’s rights.

Legal note. How the process works in general. It is not legal advice, and it never replaces an independent Spanish lawyer acting for you.