Spanish bare ownership: what it is and what it is worth

The short answer

Bare ownership is title to an asset without the right to enjoy it. That right belongs to the usufructuary, who uses the thing and takes its income¹.

How the value splits between the two is not decided by the parties: the law fixes it. A lifetime usufruct is worth 70% of the asset below the age of twenty, one point less for every further year, and never less than 10%². The bare ownership is the rest.

Two rights over one thing

Article 467 of the Civil Code defines a usufruct as the right «to enjoy another's property with the obligation of preserving its form and substance»¹. Two words in that sentence do all the work. Another's, because the ownership stays with someone else. And enjoy, because what the usufructuary gets is the use and the fruits: they can live in the flat or let it and keep the rent.

What the owner keeps is called bare ownership, and in Spanish the word nuda is literal: naked title, without the enjoyment. They can sell that right, they appear as titleholder at the Land Registry and they will hold full ownership once the usufruct ends, but in the meantime they cannot use the asset.

Article 469 allows it to be created in favour of one or several people, «at the same time or one after another», and «from or until a given day, absolutely or conditionally»¹. Article 513 lists the seven ways it ends: the usufructuary's death, expiry of the term or of the resolutory condition, the two rights meeting in one person, renunciation, total loss of the thing, resolution of the grantor's right, and prescription¹.

The age scale, which is not written the way everyone quotes it

Four rules say exactly the same thing in the same words: article 10.5(a) of the consolidated transfer tax act, article 41.2 of its regulation, article 26(a) of the Inheritance and Gift Tax Act and article 49(b) of its regulation²⁴. A lifetime usufruct is worth 70% of the total value

«where the usufructuary is under twenty years of age, reducing, as age increases, in the proportion of 1 per 100 less for each further year, with a minimum limit of 10 per 100 of the total value».

That is where the familiar 89 minus the age comes from, because 70 plus 19 is 89. But 89 appears in none of the four rules, and the difference between the rule and its shorthand matters at both ends.

At nineteen the usufruct is still worth 70%, because the rule says «under twenty». And at seventy-nine it has already reached the 10% floor, so beyond that age adding years changes nothing: an 80-year-old's usufruct and a 95-year-old's are worth the same.

Bare ownership has no calculation of its own. Article 41.4 defines it as «the difference between the value of the usufruct and the total value of the assets»⁴, so the two parts always add up to the whole.

A fixed-term usufruct is measured in complete years

Where the usufruct runs for a fixed term rather than for a life, the scale is different: 2% for each period of one year, without exceeding 70%². Thirty-five years exhaust the scale, and a longer term is worth no more.

And there is a sentence almost no guide reproduces. Article 41.1 of the regulation adds that «fractions of time of less than a year shall not be counted, although a usufruct for a period of less than one year shall be counted at 2 per 100»⁴. That has two surprising consequences:

• a six-month usufruct is worth 2%, not 1%;
• an eighteen-month usufruct is also worth 2%, because a year and a half contains a single complete year.

There is also a mixed case, a lifetime usufruct capped in years, and for it article 41.4 gives not a formula but a choice: the bare ownership is valued by applying, of the two rules, «the one that attributes the lower value to it»⁴. Being the complement of the usufruct, that leaves the usufruct with the higher of the two percentages.

The same scale across Spain

It is common to read that in inheritance matters «every region has its own rules», and in many things that is true. Not in this one.

Article 48.1 of Act 22/2009 lists the legislative powers the regions may assume in inheritance and gift tax, and there are four: reliefs against the taxable base, the scale of the tax, the pre-existing-wealth bands and multipliers, and rebates against the tax due⁷. The valuation of rights is not on that list.

So the usufruct percentage is identical in all fifteen common-law regions, while what does change from one to another is the rate and the rebates applied afterwards. It is worth saying plainly, because with forced heirship the opposite is true: there are seven separate civil regimes and the answer depends on the deceased's regional civil status. Navarre and the Basque Country have their own rules by treaty, and are outside this.

When the usufructuary is a company, the two taxes part ways

For a person the scale is the same under transfer tax and under inheritance tax, and that already answers whether inheriting rather than buying changes anything. For an entity it does not.

Article 41.3 of the transfer-tax regulation says a usufruct in favour of a legal person created «for a term longer than thirty years or for an indeterminate time shall be treated for tax purposes as a transfer of full ownership subject to a resolutory condition»⁴: one hundred per cent of the value.

Article 49(d) of the inheritance-tax regulation instead applies the fixed-term rules «without the usufruct being computable, in any case, at a value higher than 60 per 100», and that same cap governs where the duration is indeterminate⁶.

On premises worth 300,000 euros given in usufruct to a company for forty years, that is 300,000 euros of base one way and 180,000 the other: forty points of difference on the same contract. The two rules meet exactly at thirty years, because 2% a year gives precisely 60%, and that threshold is no accident: article 515 of the Civil Code forbids creating a usufruct in favour of «a town or corporation or company for more than thirty years»¹.

The day the usufruct ends

On the usufructuary's death or the expiry of the term, the bare owner becomes full owner without buying anything. But an assessment is outstanding, because at the time only the part matching the bare ownership was taxed. This is called consolidation of ownership, and article 14.1 of the consolidated act states it: «on consolidation of ownership, the bare owner shall be liable to this tax on the value of the right entering their estate»³.

The interesting question is which value, and there the two rules look at opposite ends of time.

Article 42.2 of the transfer-tax regulation says the percentage «shall be applied to the value the assets have at the moment of consolidation of ownership and at the rate of tax in force at that moment»⁴. Article 51.2 of the inheritance-tax regulation requires the first bare owner to pay «on the base of the value attributed to it at its constitution» and at the same average effective rate as the original split⁶.

On a flat split when it was worth 200,000 euros and worth 500,000 today, with fourteen points outstanding, the base on consolidation is 70,000 euros by the transfer-tax route and 28,000 by the inheritance-tax one, on exactly the same facts.

And there is a second rule that gets forgotten. Where consolidation comes not from the term or the usufructuary's death but from another transaction, articles 42.3 and 51.4 demand the greater of the two assessments, not the one for the new transaction⁴⁶.

A worked example with real numbers

A flat valued at 300,000 euros. On the father's death, the 75-year-old mother keeps the lifetime usufruct and the son receives the bare ownership.

The scale gives 89 minus 75, that is fourteen points:

• the mother's usufruct: 42,000 euros
• the son's bare ownership: 258,000 euros

The two figures add up to the flat, because bare ownership is the difference and not a separate calculation. The son is assessed for inheritance tax on 258,000 euros, not on 300,000.

Years later the mother dies and the son becomes full owner. The fourteen points left outstanding are assessed then. Had the flat been acquired by purchase and were it worth 500,000 euros today, the base would be 70,000; as it was an inheritance, the value at creation is taken and the base is 28,000 euros.

If instead of the mother the usufruct were held by a company and ran for forty years, transfer tax would see a transfer of full ownership over the entire 300,000 euros while inheritance tax would stop at 60%, or 180,000 euros.

You can reproduce any of these cases with your own figures in the Spanish usufruct calculator.

A warning about the starting value

The percentage is applied to a value, and the parties do not choose that either. Since the Act 11/2021 reform, article 10.2 of the consolidated transfer tax act takes the Catastro reference value at the date of accrual as the base for property, and only where the declared value or the agreed price is higher is the greater of those magnitudes taken³.

And finally, a way out that looks free and is not. Article 41.6 of the transfer-tax regulation and article 51.6 of the inheritance-tax one say the same thing word for word: «the renunciation of a usufruct already accepted, even if pure and simple, shall be treated for tax purposes as a gift from the usufructuary to the bare owner»⁴⁶. Accepting and then renouncing undoes nothing: it creates a second taxable event.