What is bare ownership?
Bare ownership consists of holding real estate without being able to enjoy it or receive income from it. The owner in bare ownership, called bare owner, therefore leaves the usufruct of the property to another person, generally a usufructuary. The latter has the right to use the property and receive any income from it for a specific period, often between 15 and 20 years, after which full ownership reverts to the bare owner.
Bare ownership investment gives rise to a distribution of rights between bare owner and usufructuary, each having very distinct responsibilities in the management of the property. You can see the details of this investment here .
Responsibilities of the bare owner
Responsibilities of the usufructuary
Why invest in bare ownership: the advantages
Bare ownership investment presents many advantages for investors seeking to diversify their assets. Among these, we can cite:
An attractive purchase price
The main advantage of investing in bare ownership lies in the fact that the acquisition price is generally lower than that of full ownership – a discount of up to 40% depending on the case. This allows the investor to access a quality property located in a sought-after area at a lower cost.
Reduced taxation
Investing in bare ownership also offers significant tax advantages since the bare owner does not pay tax on property income – the latter being received by the usufructuary. In addition, if he holds the property for a certain period (generally 15 to 20 years), the bare owner benefits from a reduction on the value of the bare ownership when it is reconstituted into full ownership.
Simplified management
Finally, investing in bare ownership allows the owner to free themselves from the constraints linked to rental or the daily management of their property. It is the usufructuary who assumes the current charges and must maintain the accommodation, which greatly facilitates the life of the bare owner.
Risks and precautions to take
Like any real estate investment, bare ownership presents certain risks that must be controlled to succeed in your project. Among the main precautions to take:
Choose a quality property
To maximize their chances of success, the future bare owner must ensure that they select a quality property, both in terms of its location and its layout. It is also essential to pay attention to the characteristics of the property (general condition, construction standards, etc.) as well as the financial solidity of the usufructuary in order to minimize the risks linked to the investment.
Anticipate the end of the usufruct
The end of the usufruct is a key moment for the bare owner since he will recover full ownership of his real estate. He will then have to take steps to anticipate this deadline, such as finding out about resale arrangements, checking the rental situation and the potential for development in the area in which the property is located, etc.
Be accompanied
To make a successful investment in bare ownership , it may be wise to benefit from the advice of a real estate professional or an asset management specialist. These experts will be able to help identify the best opportunities, study the feasibility of the project and anticipate the risks in order to secure the investment made as much as possible.
In short, investment in bare ownership represents an attractive solution for those wishing to diversify their assets and benefit from significant tax advantages. However, any investor embarking on this type of project must ensure that they master the specifics of the formula and take all the necessary precautions to minimize the risks associated with this type of investment
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