Selling in bare ownership: important options and formalities

Have you considered selling in bare ownership and don’t know where to start? This often unfamiliar concept paves the way for significant opportunities to transform your assets into liquidity without giving up your quality of life.

By selling the ownership of a property, you retain the right to use and enjoy it for the rest of your life, often through a life annuity that provides you with regular income.

In this journey, we will explore every step of this transaction in detail, from the essential requirements to the tax implications and how the notary plays a crucial role in the process, providing the confidence and clarity needed to move forward successfully.

What does selling bare ownership mean?

Selling bare ownership means separating the ownership of the property from its use and enjoyment.

You transfer the title of the property to a buyer, but keep your right to use and enjoy it. This agreement allows you to live in your property or use it as you always have, while the new owner is registered in their name. It is an exceptional opportunity to maintain your lifestyle while accessing significant capital.

The new owner acquires the right to dispose of the property in the future, including the possibility of selling it, renting it out, or transferring it to third parties, always respecting the agreed lifetime or temporary usufruct.

Entering into the process of selling in bare ownership gives you the possibility of obtaining an immediate flow of funds. At the same time, it is a way to invest in a property that will offer all its benefits in the future.

This real estate strategy combines financial stability and long-term investment opportunities, providing a future full of possibilities.

Advantages of selling bare ownership

Increase your capital quickly without giving up your home.

Selling in bare ownership is an efficient way to obtain significant capital. It allows you to secure a substantial sum of money that you can use for various purposes, while always maintaining the enjoyment of your home.

Financial security is one of the strongest advantages.

Having liquidity helps you deal with future expenses or make strategic investments without having to leave your home.

Additionally, in today’s dynamic real estate market with strong growth projections, both sellers and buyers can take advantage of multiple opportunities for economic and personal benefits.

Differences between bare ownership and usufruct

It is essential to understand the fundamental differences between bare ownership and usufruct—two legal concepts with unique characteristics.

• In bare ownership, the owner keeps the property title, while the usufructuary enjoys and uses the property for a defined period or for their lifetime.
• The bare owner holds the full legal title but cannot use the property until the usufruct ends.

On the other hand, the usufruct centers on guaranteeing the use and enjoyment of the property by the usufructuary, who can even receive rental income, but does not have the authority to sell or modify the property without the consent of the bare owner.

These distinctions are crucial for those who wish to continue living in their property while optimizing their financial situation.

The sale of bare ownership allows you to maintain a balance between financial flexibility and full enjoyment of the property, delivering both asset-related and personal benefits.

Steps to sell bare ownership

The first step is to carry out a comprehensive valuation of the home.

Next, it is essential to identify and contact potential interested buyers. Having specialized real estate agents is key. Once the ideal buyer is found, the sale contract is drawn up with the assistance of a notary.

Property evaluation and appraisal

When selling in bare ownership, accurately evaluating the property is vital to get the most out of your investment.

A professional appraisal ensures the price and value of the property are competitive and fair, taking into account factors like location, market conditions, and property tax obligations.

An accurate appraisal maximizes sales potential.

This evaluation strengthens negotiations and supports a successful transaction.

Finding interested buyers

Identifying buyers interested in purchasing bare ownership is a key phase. The main point lies in identifying profiles that fit your proposal.

• Working with real estate experts broadens your possibilities.
• Use specialized digital platforms and advanced online marketing tools.
• Attend real estate fairs and industry events.

Constant and transparent communication is the foundation for closing a successful deal.

Necessary legal requirements

To sell in bare ownership, it is essential to comply with certain legal requirements to protect your rights.

• Have a clear and valid property deed.
• Obtain a current certificate of encumbrances from the Land Registry.
• Obtain an official property appraisal, in some cases.

Additionally, it is essential to notify any potential tenant of the intention to sell or rent out the bare ownership, preferably through a notary to ensure legal validity.

Having specialized legal advice is crucial.

How to formalize the sale of bare ownership

The first step is to go to a notary, who will certify that the transaction meets all the legal requirements.

It is also crucial to prepare a preliminary contract that thoroughly details the agreed terms and conditions.

Afterward, the public deed of sale is signed before a notary. Once the deed is signed, it must be registered at the Land Registry, thus completing the transaction.

It is highly recommended to keep all related documentation.

Tax implications when selling bare ownership

Selling in bare ownership requires careful consideration of tax implications.

For the seller, it is essential to calculate the tax on the “capital gain.”

Careful planning is crucial to optimize your tax position.

Value Added Tax (VAT)

In most cases, the sale of bare ownership is not subject to VAT because it involves real estate and may be exempt under certain conditions.

1. Ensure the transaction is duly recorded by the notary.
2. Consult with a tax advisor.
3. Review the current legislation.
4. Maintain careful monitoring of your tax returns.

Personal Income Tax (IRPF)

The sale of bare ownership is taxed under the IRPF (Personal Income Tax) as a capital gain for the seller, and the applicable rate varies depending on current regulations. This process may seem complex, but understanding it is critical for optimizing your finances.

Assessing your financial situation not only helps you meet your tax obligations but also highlights opportunities to maximize your gains. By being well-informed, you can make strategic decisions that benefit you in the long run, ensuring a more stable and solid financial future.

Common use cases

Selling in bare ownership offers unique advantages that adapt to different profiles.

This option is often preferred by senior citizens. By selling the bare ownership but keeping the usufruct of their property, they can free up significant capital and may also consider options like a reverse mortgage.

Heirs also find advantages in this strategy, as it can remove some financial obligations such as inheritance tax and other related taxes.

In a constantly evolving economic environment, selling in bare ownership emerges as a powerful and forward-thinking solution.

Tips for bare ownership sellers

Inform yourself thoroughly before making any decision.

Professional real estate advice is essential for a safe and successful process.

Lastly, adopt a flexible but always well-informed approach.

Stay up to date on current economic trends to adapt to any changes and ensure not only immediate success, but also lasting prosperity in the future.