How to Calculate Bare Ownership Value: Formulas, Tables & Examples

Calculating the value of bare ownership is essential for both sellers who want to know how much they can receive and investors seeking profitable opportunities. This article explains the legal formulas, age-based tables, and the difference between fiscal and market value, with practical examples using real numbers.

The Legal Formula: Article 26 of the ITP Law

The fiscal calculation of bare ownership is governed by Article 26 of the Transfer Tax Act (Royal Legislative Decree 1/1993). The formula is straightforward:

Bare ownership value = Total property value – Usufruct value

The Rule of 89: Calculating Life Usufruct Value

For a life usufruct (usufructo vitalicio), the following rule applies:

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

With two limits:

• Minimum: 10% of the property value (for ages 79+)
• Maximum: 70% of the property value (for ages under 20)

Therefore:

Bare ownership value (%) = 100% – (89 – Age) = Age + 11

Or stated simply:

Bare ownership value (%) = 11 + Age of the usufructuary

Complete Age Table

Here is the complete reference table for calculating bare ownership and usufruct values:

Usufructuary’s Age	Usufruct Value (%)	Bare Ownership Value (%)
20 or under	70% (maximum)	30%
30 years	59%	41%
40 years	49%	51%
50 years	39%	61%
55 years	34%	66%
60 years	29%	71%
65 years	24%	76%
66 years	23%	77%
67 years	22%	78%
68 years	21%	79%
69 years	20%	80%
70 years	19%	81%
71 years	18%	82%
72 years	17%	83%
73 years	16%	84%
74 years	15%	85%
75 years	14%	86%
76 years	13%	87%
77 years	12%	88%
78 years	11%	89%
79+ years	10% (minimum)	90%

Fiscal Value vs Market Value: Understanding the Difference

This is a crucial distinction that many people overlook:

Fiscal Value

The fiscal value is calculated using the Rule of 89 and is used for:

• Transfer Tax (ITP) calculation
• Inheritance and gift tax purposes
• Wealth tax declarations
• Official property registry valuations

The fiscal value is a mathematical formula established by law. It doesn’t account for market conditions, property condition, or location desirability.

Market Value

The market value is what a buyer is actually willing to pay. It takes into account:

• Property condition and features
• Location and neighbourhood appeal
• Current market demand and trends
• The usufructuary’s life expectancy (which may differ from actuarial assumptions)
• Opportunity cost of capital tied up for years
• Risk factors (property maintenance, market volatility)

The market value is typically lower than the fiscal value because it incorporates the time value of money and the risks of waiting for consolidation.

Practical Example: Fiscal vs Market Value

Property: Apartment in Madrid, valued at €350,000. Usufructuary: 72 years old.

Fiscal calculation:

• Usufruct: 89 – 72 = 17% → €59,500
• Bare ownership: 83% → €290,500 (fiscal value)

Market calculation:

• Expected consolidation period: ~12 years
• Discount for time value of money (3% annually): ~30%
• Additional market risk discount: ~5%
• Market value: €290,500 × (1 – 0.35) ≈ €189,000 (market value)

The difference between fiscal value (€290,500) and market value (€189,000) reflects the real-world costs and risks that the fiscal formula doesn’t capture.

How to Calculate the Sale Price: Step by Step

Step 1: Determine the Property’s Full Market Value

Obtain a professional appraisal of the property at full ownership value. Consider:

• Recent comparable sales in the area
• Property size, condition, and features
• Location, accessibility, and amenities
• Current market trends

Tip: Use at least two independent valuations for accuracy.

Step 2: Calculate the Fiscal Bare Ownership Value

Apply the Rule of 89:

1. Determine the usufructuary’s age at the time of sale
2. Calculate the usufruct percentage: 89 – Age (minimum 10%, maximum 70%)
3. Calculate the bare ownership percentage: 100% – Usufruct percentage
4. Apply to the property value: Property value × Bare ownership percentage

Step 3: Adjust for Market Conditions

The market price is typically calculated by applying discounts to the fiscal value:

Adjustment Factor	Typical Range
Time value of money	–15% to –30%
Market risk	–3% to –8%
Liquidity discount	–2% to –5%
Property condition premium/discount	–5% to +5%
Location premium	0% to +10%

Step 4: Negotiate the Final Price

The final price is agreed between buyer and seller, typically falling within the range:

Market value = Fiscal value × (0.55 to 0.75)

This means the buyer typically pays 55–75% of the fiscal bare ownership value, which itself is already a fraction of the full property value.

Real-World Calculation Examples

Example 1: Apartment in Barcelona

Parameter	Value
Property type	90m² apartment, Eixample
Full market value	€420,000
Usufructuary age	68 years
Usufruct value (89 – 68)	21% = €88,200
Fiscal bare ownership	79% = €331,800
Market adjustment (×0.60)	€199,000
Discount vs full value	53%

For the seller: receives €199,000 in cash while continuing to live in the apartment. For the buyer: acquires a €420,000 property for €199,000 — a 53% discount.

Example 2: Detached House in Madrid

Parameter	Value
Property type	150m² house, suburb
Full market value	€380,000
Usufructuary age	76 years
Usufruct value (89 – 76)	13% = €49,400
Fiscal bare ownership	87% = €330,600
Market adjustment (×0.65)	€215,000
Discount vs full value	43%

Example 3: Coastal Apartment in Málaga

Parameter	Value
Property type	75m² apartment, seafront
Full market value	€280,000
Usufructuary age	82 years
Usufruct value (minimum)	10% = €28,000
Fiscal bare ownership	90% = €252,000
Market adjustment (×0.72)	€181,000
Discount vs full value	35%

Note how the discount decreases as the usufructuary’s age increases — because the expected waiting period is shorter, the investment is less risky.

Temporary Usufruct: A Different Calculation

When the usufruct is for a fixed period (not lifelong), the calculation differs:

Usufruct value (%) = 2% × Number of years of usufruct

With a maximum of 70%.

Example: 10-year usufruct on a €300,000 property:

• Usufruct value: 2% × 10 = 20% = €60,000
• Bare ownership value: 80% = €240,000

Temporary usufructs are less common than life usufructs but can offer interesting investment opportunities with a known time horizon.

Factors That Affect the Market Price

Beyond the formula, several factors influence the actual price paid:

Factors That Increase the Price

• Prime location: Madrid centre, Barcelona Eixample, coastal areas
• Excellent condition: recently renovated, well-maintained
• Older usufructuary: shorter expected wait time
• High demand area: strong rental and resale market
• Good building quality: reduces extraordinary repair risk

Factors That Decrease the Price

• Poor location: rural areas, low-demand zones
• Property needing work: structural issues, outdated systems
• Younger usufructuary: longer expected wait time
• Market uncertainty: economic downturns, regulatory changes
• Complex legal situations: multiple usufructuaries, inheritance disputes

Tax Implications of the Valuation

The calculation method affects your tax obligations:

Transfer Tax (ITP)

The buyer pays ITP on the fiscal bare ownership value (not the market price paid). This means:

• Higher fiscal value = higher ITP
• The ITP rate varies by autonomous community (6–10%)
• For detailed tax information, see our tax guide

Capital Gains Tax (Seller)

The seller’s capital gains are calculated on the difference between the sale price and the original acquisition cost (adjusted for inflation). Sellers over 65 selling their primary residence may be exempt from capital gains tax.

Wealth Tax

The bare ownership is declared at fiscal value in the wealth tax return, which may be higher or lower than what was actually paid.

Online Calculators: Are They Reliable?

Many websites offer bare ownership calculators. While these can give a rough estimate, they typically:

• Use only the fiscal formula (Rule of 89)
• Don’t account for market conditions or property-specific factors
• Don’t consider the time value of money
• Provide the fiscal value, not the market price

For an accurate valuation, we recommend consulting with a professional. At NudaPropiedad, we provide free, personalised valuations based on a comprehensive analysis of your specific situation.

Conclusion

Calculating bare ownership value involves two layers:

1. Fiscal value (Rule of 89): a simple mathematical formula used for tax purposes
2. Market value: the actual price, adjusted for time value, risk, and market conditions

Understanding both is essential whether you’re selling your property or investing in bare ownership. The fiscal formula gives you the legal framework; the market analysis gives you the real price.

Want to know the value of your bare ownership?

• Contact us for a free valuation
• Browse available properties with transparent pricing
• Learn about tax implications
• Understand your rights as a usufructuary