Buying bare ownership in Alicante: patient bricks

Señora Carmen is eighty-two and has lived on the fourth floor of a building without a lift in Benalúa since 1984. The kitchen smells of coffee and orange blossom when she opens the window in March. Her widow's pension is 936 euros a month and the flat is worth two hundred thousand. Last week she signed away the bare ownership in front of a notary. She still sleeps in the same bed. Now she has ninety thousand euros in a Caixabank passbook.

In 2025 that quiet gesture was repeated 433 times in the Comunidad Valenciana alone. One in four Spanish bare-ownership transactions was signed here, according to figures from the Consejo General del Notariado collected by the Fundación Edad y Vida. If you live in Alicante and walk a street at night, more balconies than you think hide this silent pact between an older owner who needs cash and a buyer in no hurry.

The building splits into two rights

Since 1889 the Spanish Civil Code has distinguished between the dominio (full ownership) and two rights that can be separated: the nuda propiedad (bare ownership) and the usufructo (life interest). The nudo propietario is the formal owner: she appears in the Land Registry, her children inherit when she dies, she pays the IBI on structural matters if so agreed. The usufructuario has the right to use and enjoy the property as if it were her own, until she dies or until the agreed term expires, under article 467 and following of the Code.

When Carmen sells the bare ownership and keeps the lifelong usufruct, legal title passes to the buyer, but she keeps the key, the decision to paint the kitchen, and the right to host her granddaughter in the spare room. The consolidación del dominio (the moment when the two rights merge again) will happen the day she dies. Until then the buyer is owner on paper and nothing more.

89 minus the age

The value of a lifetime usufruct is calculated with the rule in article 26 of Law 29/1987 on Inheritance and Donation Tax, replicated in the ITP regulations. You subtract the usufructuary's age from 89, and the result is the percentage of the total value that the usufruct is worth. Minimum 10 %, maximum 70 %.

Carmen is 82: 89 minus 82 is 7, which is below the floor, so the usufruct is worth 10 %. The bare ownership is worth the remaining 90 %, that is, 180,000 euros on a flat valued at 200,000. But no one signs at that price in the real market. The buyer discounts longevity risk, the asset's illiquidity, and shared expenses. Commercial discounts on the Costa Blanca run from 30 % to 60 % of the theoretical price. Every year the usufructuary turns, the bare owner gains value automatically.

Why Alicante leads the map

The INE places the province of Alicante at 20.5 % of population over 65, slightly above the national average. That is around 390,000 people. Many live in flats bought in the seventies and eighties, paid off long ago, sometimes without a lift, with average pensions of 1,510 euros for contributory retirement and 936 for widowhood. Edad y Vida observes that the average age of the bare-ownership seller has fallen from 81 to 74.5 years over five years: not the very old, but the recently retired who want to clear the mortgage, help a child, or simply live with breathing room.

The buyer, by contrast, is usually a Spanish patrimonial investor or a foreign resident with capital and a long horizon. On idealista, dozens of Costa Blanca listings carry the bare-ownership tag: a townhouse in Rojales with a market value of 200,000 euros offered at 110,000 (45 % discount); a studio in Torrevieja of 110,000 euros signed for 42,000 (58 % discount).

The taxes you pay on signing day

The buyer pays ITP on form 600 over the value of the bare ownership, not over the full property value. In the Comunidad Valenciana the general rate is 10 % until 31 May 2026 and drops to 9 % from 1 June, under the regional fiscal reform passed for this year. Properties valued above one million euros are taxed at 11 %.

On Carmen's example: if the buyer pays 90,000 euros for a bare ownership whose minimum fiscal value is 180,000, the tax authority will settle on the higher of the two (declared value or cadastral reference value). It is worth checking the reference value before signing, because since 2022 that value has replaced the so-called real value for tax purposes. The AJD drops from 1.5 % to 1.4 % in the same reform, though it only affects the mortgage deed if there is one.

The day after: how living together is split

In personal income tax (IRPF) the bare owner does not pay imputed property income while the usufruct lasts: that presumed rent of 1.1 % or 2 % of the cadastral value is declared by the usufructuary. It is a small recurring advantage that often goes unnoticed. The bare owner cannot deduct expenses from the flat either, because she does not hold it for tax purposes.

The split of expenses follows articles 500 to 505 of the Civil Code, unless the deed says otherwise. The usufructuary pays for ordinary repairs, IBI, utilities, and the ordinary community fee. The bare owner takes on extraordinary repairs and, usually, structural levies: roof, facade, lift installation, slab reinforcement. In a 1960s building in Carolinas or Pla del Bon Repós this is not rhetoric: a levy for aluminosis or for installing a lift can exceed 8,000 euros per flat. Read the deed with this in mind and, if the building shows visible pathologies, demand a current IEEV.CV before signing.

Consolidating the ownership

The day the usufructuary dies, the bare owner consolidates the ownership and becomes a full owner. Nothing is bought again: the rights merge automatically. But there is a tax procedure. A consolidation self-assessment is filed with the Generalitat Valenciana within six months of the death, with another six months extendable on request.

The taxable base is the value the usufruct had on the date of dismemberment (the original signing), applying the ITP rate then in force. It is not updated to current market value. If Carmen lives ten more years and the flat is now worth 280,000, the buyer does not pay on the accumulated capital gain: he pays on 10 % of the original value. This is one of the operation's least visible and most powerful tax advantages.

What can go wrong

Life-expectancy tables play with averages, but a real life does not. A 75-year-old usufructuary may live to 95 with an empty flat that the investor cannot occupy or rent for twenty years. The deal yields a theoretical return (the gap between what was paid and the discounted future full value), but it produces no cash. If the buyer needs liquidity before consolidation, he will have to sell the bare ownership on a very thin secondary market, almost always at a loss.

The second risk is decay. A usufructuary must keep the property with the diligence of a good householder, under article 497, but he turns 90, stops doing repairs, and the damp creeps in. The bare owner inherits a flat that needs gutting. It is wise to write into the deed a joint home insurance policy and a clear statement of obligations.

Who it actually fits

Bare ownership is not for someone chasing tourist rental income or quick appreciation. It is for the investor with passive capital and a ten- to twenty-year horizon. The buyer who pays 90,000 euros today for a flat his daughter will inherit at 250,000. The one who understands that the return is not collected in monthly installments, but in a single deed, on some ordinary morning, in the office of the notary who signs the consolidation.

Carmen, meanwhile, has the orange blossom of March, the canary in the courtyard, and ninety thousand euros in a passbook. The operation has given her what no financial product had managed to: cash today and the right to live where she chooses until the end.

If this kind of patient investment interests you, you can explore our properties or contact us to talk through your horizon and your profile.