What Is Bare Ownership? The Complete Guide

Bare ownership — known in Spanish as nuda propiedad — is a legal concept gaining significant traction in the European real estate market. It offers a unique property ownership structure that benefits both sellers (typically seniors) and buyers (investors seeking discounted real estate). This comprehensive guide explains everything you need to know about bare ownership, how it works, and why it’s becoming one of the smartest strategies in the Spanish property market.

Definition of Bare Ownership: A Simple Explanation

Bare ownership is the right to own a property without having the right to use or enjoy it. In other words, you are the legal owner “on paper,” but you cannot live in the property or earn rental income from it as long as a usufruct exists.

Think of property ownership like a whole orange. If we split it, we get two parts:

• Bare ownership (nuda propiedad): the “peel” — the structural right of ownership.
• Usufruct (usufructo): the “flesh” — the right to use and enjoy the property.

When both parts are reunited in a single person, we have full ownership (pleno dominio): complete property rights with no restrictions.

Why Does This Distinction Matter?

This legal distinction is not merely academic. It has profound practical implications:

• For sellers: elderly homeowners can sell the bare ownership while retaining the usufruct, allowing them to receive a lump sum while continuing to live in their home for life.
• For buyers: investors can acquire properties at a 30–50% discount compared to their market value, with the expectation of gaining full ownership in the future.
• For heirs: understanding bare ownership is crucial for inheritance planning, as it affects succession rights and tax obligations.

How Bare Ownership Works Under Spanish Law

The Spanish Civil Code regulates bare ownership through several key provisions that provide a robust legal framework.

Article 467 of the Civil Code

“Usufruct grants the right to enjoy another person’s property with the obligation to preserve its form and substance, unless the terms of its constitution or the law authorise otherwise.”

This article defines the usufruct, the counterpart to bare ownership. While the usufructuary enjoys the property, the bare owner retains legal title.

Article 468 of the Civil Code

“Usufruct may be established by law, by the will of individuals expressed in acts inter vivos or by last will, and by prescription.”

This means the separation between bare ownership and usufruct can be established through:

• Purchase agreement (contract between living parties)
• Will or testament (last wishes)
• By law (such as the surviving spouse’s legal usufruct)

Article 489 of the Civil Code

The bare owner has the right to:

• Sell or transfer their bare ownership to a third party
• Mortgage the bare ownership (though rarely done in practice)
• Carry out extraordinary repairs if needed to preserve the property’s structural integrity
• Inspect the property to ensure it is being properly maintained

Differences Between Bare Ownership, Usufruct, and Full Ownership

Understanding these three concepts is fundamental to making informed decisions:

Concept	Title Holder	Can Live in the Property?	Can Sell?	Can Rent Out?
Full ownership	Complete owner	Yes	Yes (everything)	Yes
Usufruct	Usufructuary	Yes	No (only the usufruct)	Yes
Bare ownership	Bare owner	No	Yes (only bare ownership)	No

Full Ownership (Pleno Dominio)

This is the complete ownership of a property. The holder has all rights: to use, enjoy, dispose of, and claim the asset. This is what most people understand when they say “owning a property.”

Usufruct (Usufructo)

The usufructuary has the right to use and enjoy the property — meaning they can live in it, rent it out, and collect its fruits — but they cannot sell the underlying property. Their right is temporary: it can be for a set period or for life (usufruct vitalicio).

Bare Ownership (Nuda Propiedad)

The bare owner has the title deed to the property but cannot use it while the usufruct is active. Their main advantage is acquiring the property at a significant discount, knowing they will eventually gain full ownership when the usufruct ends.

How Is a Bare Ownership Transaction Structured?

A typical bare ownership transaction in Spain follows these steps:

1. Property Valuation

A professional appraisal determines the property’s full market value. This is the starting point for all calculations.

2. Usufruct Valuation

The value of the usufruct is calculated based on the age of the usufructuary using the “Rule of 89”:

Usufruct value (%) = 89 – Age of the usufructuary

With a minimum of 10% (for ages 79+) and a maximum of 70% (for ages under 20).

Usufructuary’s Age	Usufruct Value	Bare Ownership Value
65 years	24%	76%
70 years	19%	81%
75 years	14%	86%
80+ years	10% (minimum)	90%

3. Calculation of the Sale Price

The bare ownership price is determined by subtracting the usufruct value from the full property value:

Example: Property valued at €300,000 with a 75-year-old usufructuary:

• Usufruct value: 14% × €300,000 = €42,000
• Bare ownership value: 86% × €300,000 = €258,000
• Market discount applied: the buyer typically pays €150,000–€180,000 (reflecting the time value and market conditions)

4. Notarial Deed and Registration

The transaction is formalised before a notary public, and the following is recorded:

• Transfer of bare ownership to the buyer
• Life usufruct retained by the seller, registered in the Land Registry (Registro de la Propiedad)
• Payment terms (lump sum, annuity, or combination)

5. Tax Payment

The buyer pays the Transfer Tax (ITP), calculated on the fiscal value of the bare ownership — not on the full property value. This results in significant tax savings. For a detailed breakdown, see our tax guide.

Advantages of Bare Ownership

For the Seller (Homeowner)

1. Immediate liquidity without leaving home
2. Lifelong right to live in the property (registered usufruct)
3. No debt or interest — unlike a reverse mortgage
4. Complete legal protection under the Civil Code
5. Option to rent out the property and keep the rental income
6. Tax benefits for seniors over 65

For the Buyer (Investor)

1. 30–50% discount on the property’s market value
2. Double appreciation: property value rises + usufruct value diminishes over time
3. No management costs during the usufruct period (the usufructuary pays utilities, property tax, and community fees)
4. Ethical investment that helps seniors improve their quality of life
5. Low risk: real estate is a tangible, stable asset
6. Tax advantages on the Transfer Tax (calculated on bare ownership value, not full value)

Risks and Considerations

While bare ownership is generally a safe investment, it’s important to understand the risks:

• Time horizon: you won’t gain full use of the property until the usufruct ends. This is a long-term investment.
• Extraordinary repairs: the bare owner is responsible for major structural repairs.
• Property condition: the usufructuary must maintain the property, but there’s a risk of deterioration.
• Liquidity: bare ownership is less liquid than standard real estate — finding a secondary buyer can take time.

Who Is Bare Ownership For?

Ideal Seller Profile

• Homeowners aged 65+ with limited pension income
• Those who want to stay in their home for life
• People who prefer a clean, debt-free solution (not a loan)
• Those who want to help their heirs with advance inheritance planning

Ideal Buyer Profile

• Long-term investors willing to wait for full ownership
• Those looking for discounted real estate in prime locations
• Ethical investors who value socially responsible opportunities
• People seeking portfolio diversification beyond traditional investments

Frequently Asked Questions

Can the bare owner evict the usufructuary?

No. The usufruct is a legally protected real right (derecho real) registered in the Land Registry. Even if the bare owner sells their share, the new buyer must respect the existing usufruct.

What happens when the usufruct ends?

The bare owner automatically becomes the full owner. No additional legal procedures are required — the consolidation of ownership happens by operation of law.

Can I sell my bare ownership to someone else?

Yes. The bare owner can freely sell, donate, or transfer their ownership rights. However, any new owner must respect the existing usufruct.

Is bare ownership safe?

Yes. It is fully regulated by the Spanish Civil Code and the transaction is formalised before a notary public and registered in the Land Registry, providing maximum legal security.

Conclusion

Bare ownership is a well-established, legally protected property arrangement that offers compelling benefits for both sellers and buyers. For homeowners over 65, it provides a way to unlock the value of their property while continuing to live in their home with total security. For investors, it offers access to prime real estate at significant discounts.

If you’re interested in learning more about bare ownership, explore our other guides:

• How to calculate bare ownership value
• Bare ownership vs reverse mortgage
• Tax aspects of bare ownership
• Bare ownership for seniors

Ready to take the next step? Contact us for a free, no-obligation consultation, or browse our available properties.