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Property purchase in Spain with usufruct and bare ownership

27 Apr
A judge's gavel and a briefcase illustrating tax residence in Spain.
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Automatic translation from Google translate:


Property purchase in Spain: pros and cons of purchase in usufruct and bare ownership


Usufruct is, in Spain as in France or Belgium, a right to enjoyment of property, where a person can use the assets of another person and receive the profits, with the obligation to conserve and maintain the asset as if it were their own.

In the event of the death of the usufructuary, the formalities relative to the registration of the property under bare ownership are extremely easy given that simply producing the death certificate is sufficient, though it isn’t always the best solution for tax purposes.

The constitution of the usufructuary and bare ownership rights are subject to the Inheritance Transfer Tax (ITP) if the constitution is carried out with a charge, and to the Inheritance and Donations Tax (ISD) if carried out without charge. The rate of the taxes applicable is determined based on the value of the asset in full ownership.

Upon consolidation of full ownership after the death of the usufructuary, the inheritance and donations tax will also be due on the value of the usufruct calculated at the time of creation of the usufruct (and not at the time of death).



In the case of immediate resale, the capital gains tax will be calculated on the difference between the current value and the value at the time of constitution of the usufruct, and not on the date of consolidation of the same, whereas if the asset is acquired simply by inheritance (paying ISD on the value at the time of death but with numerous exemptions and bonuses for direct line heirs), immediate sale will not generate capital gains tax.

Before establishing this structure, it is advisable to fully analyse the intention of the parties. If the intention of the parties is to sell the asset upon the death of the usufructuary, this structure may not be the most tax advantageous.

This article is written by one of our independent partners in Spain, Sophie, who is our Legal partner in Valencia. Check her profile in our team section.

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