The Sale of the Bare Ownership consists of the owner of a property (generally a senior citizen) transferring legal ownership of their home in exchange for a single payment, just like a regular property sale. However, they also reserve the right to continue to use the home for as long as they live or move to a nursing home.
We use a sophisticated financial model to arrive at the correct value of the deal. The model collates numerous actuarial, real estate and financial factors; the market value of the property, the life expectancy of the beneficiaries, demand for the type of property etc.
Bare Ownership types
- Usufructo Vitalicio: this is the most common modality in Spain which sees the seller reserve the use and enjoyment of their home for life.
- Usufructo Temporal: An option for our clients and investors in which the seller reserves an usufruct (right to live in the house) for a specific period of time, with 5 or 10 years being most commonly requested by our clients
Depending on which option you choose will determine the investment value, obviously a defined period attracting premium.
Why is there such demand ?
Our thousands of elderly clients have been looking for financial solutions as remortgaging is very difficult to do here in Spain. It is the same for private lending. JJC Capital Partners have solutions for clients who are unable to get finance from the Spanish bank.
Once the bare ownership of the property is sold, The sellers will immediately enjoy the benefits of not having to pay property tax, extraordinary community fees, and will reduce the cost of insurance and maintenance. They will not pay rent in many circumstances and will live for free in their own property without ever having to downgrade, just to survive financially.
Bare Ownership advantages
We work with some of the top tax advisors in Spain. Our sellers will often receive a TAX-FREE lump sum with which they can clear debts, travel across the world or pay for families life events like weddings, college education etc.
We protect our buyers and sellers. The formalization of a bare ownership deal, like any other purchase in Spain, is carried out with all the legal guarantees before a Notary and is registered in the Land Registry of Spain.
“Usufructo”, a common legal clause in Spain is the right to remain living in the home for life and is stated in the deed itself and does not expire.