Anticipate your future, think bare ownership!

The february 18, 2020

Rental investment is booming. 'Pinel' in mind. If the real estate investment classics are good, they are not always the best! Today, we tell you more about the challenger: buying bare ownership. And you will see, it has the arguments to convince you!

Buying a bare property, allows you to:
• Increase your wealth for a reduced cost,
• Improve your retirement,
• Optimize your taxation,
• Prepare the transmission of your assets.

How it works ?
Instead of obtaining full ownership of a property (house, apartment, but also shares in REIT), you only buy bare ownership (the right to dispose of the property). The usufruct is acquired by a third party for an average duration of 15 years. In the end: you automatically recover the full property without paying a penny more (and this even if in 15 years, your property has increased in value)!

Reduced cost?
You will not enjoy your property for the duration of the dismemberment of property. So with the purchase, it is as if you received in one go the rents that you would have received during all this period in the form of a significant discount (40% on average!) at time of purchase.
As for charges, only major repairs may fall under the responsibility of the bare owner (article 606 of the Civil Code) as this may be negotiated thru the convention ruling the dismemberment. Otherwise, the usufructuary is in charge!

What about taxes?
During the entire dismemberment period, since you do not receive any property income, your investment does not increase your taxes. Better still, if you have taken out a loan and the usufructuary is a social landlord, you can deduct loan interest from your other property income. The bonus if you are subject to the French IFI: the property held in bare ownership is not included in the calculation of taxable wealth.

At the end of the dismemberment, the property is yours, you can keep it to benefit from additional income, inhabit it, resell it and take advantage of the capital accumulated.

Divide to better transmit!
To separate bare ownership and usufruct is also to benefit from a fantastic mode of transmission.
Indeed, insofar as you only pass on bare ownership to them, your heirs will have to pay gift duties calculated solely on the value of the latter. And when the usufruct returns to them, no additional tax will be due.

When buying or transmitting, you have to think about dismembering!

We stirred your curiosity? You would like to know more about it? Let's make an appointment!


Article by : Etienne KAJOIN

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