Bare ownership (nuda propiedad) is the right to own a home without being able to use it: the bare owner holds the title, but another person, the usufructuary, lives in it or rents it out and enjoys it while the usufruct lasts. When the usufruct ends, usually on the usufructuary's death, the bare owner acquires full ownership without paying anything more for it.
Selling the bare ownership of your home while keeping a lifetime usufruct lets you receive money today and go on living in your home for life. In practice you transfer the title —who will own it in the future— but keep the right to use and inhabit the property for as long as you live. It's an arrangement that has grown popular among older owners who want liquidity without moving, and below we explain, step by step, how it works, how much you get depending on your age and what taxes are involved.
What are bare ownership and usufruct?
Full ownership of a home can be split into two rights: bare ownership (holding the title, the owner "on paper") and usufruct (the right to use, inhabit and enjoy the home). When you sell the bare ownership and keep the usufruct, the buyer becomes the titleholder but cannot occupy the home: you carry on living there. When the usufruct ends —usually on the usufructuary's death— the buyer consolidates full ownership.
Bare ownership, usufruct and full ownership: what are the differences?
| Right | What it allows | Who pays what (as a rule) |
|---|---|---|
| Bare ownership | Holding the title and selling or donating the bare ownership, but not using the home | Major and structural works |
| Usufruct | Living in the home, renting it out and collecting the rent | IBI property tax, ordinary community fees, utilities and ordinary repairs |
| Full ownership | All of the above at once | All costs |
A practical detail that surprises many people: the IBI property tax is paid by the usufructuary, not the bare owner, because the local finance law places the usufructuary ahead of the owner as the person liable for the tax.
How is the bare-ownership price calculated?
The bare-ownership price is lower than market value because it discounts the value of your usufruct. The tax office sets a guideline formula (art. 26 of the ITP & AJD Law): the usufruct percentage is 89 minus the usufructuary's age, with a minimum of 10% and a maximum of 70%. The older you are, the smaller your usufruct and therefore the larger the share (and price) of the bare ownership you sell.
With an example: a home worth €300,000 and a 70-year-old owner → usufruct 89−70 = 19% (€57,000), and bare ownership 81% (€243,000). By age it looks like this:
| Age | Usufruct | Bare ownership | Amount (€300,000 home) |
|---|---|---|---|
| 65 | 24% | 76% | €228,000 |
| 70 | 19% | 81% | €243,000 |
| 75 | 14% | 86% | €258,000 |
| 80 | 10% | 90% | €270,000 |
These are guideline figures from the tax formula; the final price is negotiated between the parties.
What happens if you buy a flat in bare ownership?
You buy at a discount today a home you will not be able to use until the usufruct ends. For the buyer it is a long-term investment: there is no rental income while the usufructuary lives, but the entry price is lower and, once full ownership is consolidated, the home is worth whatever the market says at that moment. The risk is the timeframe: nobody knows how many years a lifetime usufruct will last.
Before signing, check at the Land Registry that the home is free of charges, put in writing who covers special levies and major works, and inspect the condition of the property, because you will not be able to go in and renovate it while the usufruct lasts.
The sale, step by step
- Get the home valued. Start from a professional market valuation; the usufruct discount is applied to that value.
- Work out usufruct and bare ownership with the age formula (89 − age) to know what share you're selling.
- Find a buyer. It's a niche product: there are platforms and investors specialising in bare ownership.
- Negotiate and put the terms in writing: price and payment method (lump sum or instalments), whether the usufruct is for life or fixed-term, who pays the IBI, community fees and utilities, how special levies and works are shared, and whether you may rent the home out.
- Sign the deed before a notary and register it at the Land Registry. Registration is the key to your security: once a lifetime usufruct is registered, no subsequent buyer can take away your right to live in the home.
What taxes are due?
For the seller (usufructuary), the gain is taxed in personal income tax (IRPF) on the difference between the transfer value of the bare ownership and its acquisition value, plus a possible municipal capital-gains tax. The key advantage: if you are 65 or over and the home is your main residence, the capital gain is usually exempt from IRPF. For the buyer (bare owner), transfer tax (ITP) applies to the bare-ownership value —in Andalusia, 7%— and, later, a tax on consolidating full ownership when the usufruct ends. Every case differs: it's worth checking the exact figures with an adviser.
How does it differ from a life annuity?
| Aspect | Bare-ownership sale | Life annuity |
|---|---|---|
| What you transfer | Bare ownership only | Full ownership |
| How you're paid | A lump sum (or instalments) | A monthly income for life |
| Where you live | You stay in your home (usufruct) | You stay in your home |
There are also other liquidity routes without selling outright, such as a reverse mortgage (income or capital secured on the home, without transferring ownership) or renting out rooms. The choice depends on whether you prefer a single payment or regular income, and on what you want to leave your heirs.
What is bare ownership in an inheritance?
This is the most common situation in Spain, and it arises from an inheritance rather than a sale. When one parent dies, the children usually inherit the bare ownership and the surviving spouse keeps the usufruct, either under the will or because the Civil Code grants them the usufruct of part of the estate. The children are the owners, but the father or mother keeps living in the house.
When the usufructuary dies, the children consolidate full ownership and settle the inheritance tax still due on that consolidation. In Andalusia, the 99% relief for inheritances between parents and children means the bill is minimal in most cases, but the paperwork still has to be done.
Pros and cons
- For: immediate liquidity without leaving your home, the right to live in it for life and, for the over-65s, a lighter tax treatment.
- Against: you receive well below market value, ownership is split (future decisions are more complex) and the pool of buyers is narrower.
Does it make sense on the Costa del Sol?
It can, for a specific reason: in Málaga and on the Costa del Sol many older owners —Spanish and foreign residents settled here— hold homes that have appreciated strongly and are in high demand. That improves both the starting valuation and the chance of finding a buyer for the bare ownership. Even so, it's a technical and very personal transaction: the price, the type of usufruct and the split of costs make the difference. At EVS Property Group we value your home with real data for your area and guide you so the decision is informed, not rushed.
Frequently asked questions
Can the buyer evict me after buying the bare ownership?
No. Once the lifetime usufruct is signed and registered at the Land Registry, no later buyer can deprive you of your right to live in the home, provided the contract terms are respected.
Can I sell the bare ownership if I still have a mortgage?
Yes, usually by paying off the mortgage with the sale proceeds or agreeing its cancellation with the bank. Buyers normally require the property to be free of charges.
What if we are a married couple?
The usual arrangement is a joint lifetime usufruct: it doesn't end until the death of the last surviving spouse, so whoever survives keeps living in the home.
What happens if the bare owner dies?
Nothing changes for the usufructuary: they keep living in the house. The bare ownership passes to the bare owner's heirs, who will be the ones to consolidate full ownership when the usufruct ends.
What are the drawbacks of bare ownership?
For the seller, they receive less than market value and ownership is split. For the buyer, their money is tied up for an uncertain period with no income. And for both, decisions about the home (selling full ownership, carrying out major works) require agreement.
