Investment in bare ownership: what taxation on exit?

Posted November 10, 2023 at 9:17 am

Jacques would like to clarify the rules applicable to the calculation of capital gain in the case of resale of the property. Is this type of investment penalizing the investor who bought the property at a discount? Advantages of Buying Bare Ownership There are various situations that lead to the division of property ownership. Some suffer. This is when a surviving spouse chooses to inherit a usufruct, often to secure their lifestyle and retain the use or income from the deceased’s estate. In this case, the children find themselves as bare owners without choosing to do so, and only actually inherit the property after the death of the beneficiary. However, asset fragmentation also allows the transfer of assets to be anticipated without wasting too quickly. In general, this technique consists of providing bare ownership while retaining the usufruct.

This technique is very interesting from a tax point of view, because after the death of the usufructuary, the bare owners (usually the children) get the property back without having to pay inheritance tax on the usufruct they receive. Transfer tax is only borne by the value of the property in bare ownership. But this technique is not reserved for family circles. A number of apartments have been developed which can be purchased in the cut-up property so that investors can become owner-occupiers while enjoying a discount of up to 40% on the price of the property. In return, the investors grant usufruct to a third party who leases the property for a transitional period (usually 15 to 20 years).

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