Carlos Baos – Do You Want To Sell Your Home But Keep Living In It?

Image - selling your home: Billion Photos/shutterstock

Image - selling your home: Billion Photos/shutterstock

Can I sell my property but keep living in it? Selling while keeping the usufruct explained. Spanish Lawyers.

This week we would like to address a situation in which homeowners can sell their property but, at the same time, continue to live in it. We are referring to the possibility of selling a house but keeping the usufruct. This will allow owners to continue living in their home for as long as they are alive. In addition, they will receive either a single amount of money or a monthly rent in compensation. We analyse it below.

How exactly does it work?

The full ownership of a home can actually be divided into two: on the one hand, the bare ownership; on the other, the usufruct. This are two distinct parts that complement each other.

The bare owner has rights over the house but cannot use it since he/she does not have the possession, use and enjoyment of the property.

With the usufructuary happens the exact opposite. He is not the owner of the property but has the use and enjoyment.

What is the sale of a property but keeping the usufruct?

The sale with reservation of the usufruct consists precisely in the sale of the ‘bare ownership’ (rights over the property). This allows an individual to cease being the owner (in exchange for a certain amount of money) but to continue to live in his/her house while he/she is alive. The usufruct will be valued economically, depending on various factors: the value of the property itself, the age of the usufructuary, etc.

How is it calculated?

The way to calculate the value of the usufruct is not very complicated. It is sufficient to subtract the age of the usufructuary from the number 89. For instance. If a person is 81 years old, the usufruct value would be calculated as follows: 89 – 81 = 8. The usufruct would be valued at 8 per cent of the ‘price’ of the property.

Most common ways to sell your property but keep the usufruct

– Fixed price.

It consists of selling the bare property in exchange for an amount of money paid in a single instalment. For instance, and continuing with the example set up above, if the property is valued at €200,000 and the usufruct is 8% (€16,000), the price to be received in a single payment would be €184,000.

Taxes payable by the buyer: Transfer tax (10% Valencia, 7% Andalucia, etc).

Taxes payable by the seller: Plusvalía and Capital Gains Tax.

– Life annuity.

The payment will take the form of a monthly annuity for as long as he/she lives. Its amount will be determined by the age of the usufructuary. In this case, the purchaser will also pay transfer tax. But be careful: depending on the age of the vendor/usufructuary, the value of the property, etc. it is possible that this transaction is also subject to Donation Tax.

At White Baos Lawyers we are experts in conveyancing. If you want to sell your property, and you wish to explore the possibility of continue living in it, please do not hesitate to contact us. We will study your case and offer you expert legal advice.

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Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185


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Written by

Carlos Baos (Lawyer)

Lawyer Carlos Baos has been advising on variety of expat-related legal issues for years and weekly column offers free weekly insights.