16
nov
Bare ownership, a brief essential guide
Even in Italy the bare ownership begins to take force with conviction, thanks to a greater knowledge of this legal instrument and a steady increase, by the sellers (future usufructuaries) of the desire to "monetize" their real estate assets.
But what exactly is bare ownership? And why might it be a formula that could be worth evaluating positively?
What is bare ownership
In order to define bare ownership, it may be useful to start with the definition of usufruct, i.e. that right, exercised by a person (usufructuary), to enjoy an asset (in this case, an apartment), which will be owned by the bare owner. The usufructuary will therefore be able to continue to inhabit the property in bare ownership for the entirety of his or her existence, but will not be able to change its economic destination nor neglect the need to preserve the property in a diligent manner.
From the above, it should be easier to understand that when the seller transfers the bare ownership, he is in fact transferring the ownership of the property to the buyer, but he is also retaining the possibility of using it for life.
In even simpler terms, whoever sells the bare ownership can keep the right of habitation of the property until the end of his life, with the bare owner who - therefore - while enjoying a real right on the property, will be able to fully dispose of it only at a later date.
What are the advantages of bare ownership
Although at this point of our brief guide the advantages of bare ownership should already be quite clear in relation to both parties, we can evidently share that the seller of the bare ownership could gain a benefit from such an operation because, while remaining to live in what was "his" house, he will still get the opportunity to live there until his death. After this event, the usufruct will be extinguished and will be "reunited" with the bare ownership, with the buyer who will finally have full availability of the property.
However, the advantages are also for the buyer: the latter will be able to buy a property at a reduced price compared to the market price (considering that the sale value will be net of the usufruct) and, at the seller's death, will be able to acquire full ownership.
How are the expenses divided with the bare ownership?
One of the most frequent doubts concerning the subject of bare ownership is related to the division of expenses.
Generally speaking, and unless there are different agreements between the parties, the expenses relating to the ordinary maintenance of the property in good condition are entirely the responsibility of the usufructuary. In other words, it is the usufructuary who will have to make sure that the systems work, and who will have to bear all the charges related to the decent maintenance of the property, avoiding to damage it and to modify its economic destination (unless there is no unity of intent with the bare owner).
As far as extraordinary expenses are concerned, these are at the expense of those who will have purchased the bare property. Therefore, if it proves necessary to replace the fixtures, the relative charges will be borne by the person who has purchased the property, but who is not yet able to enjoy it.
Finally, we would like to remind you that, by law, all the taxes on the property (such as IMU or TASI) are to be paid by the usufructuary: it is the Civil Code which states that whoever enjoys the material availability of the property will be subject to the payment of such taxes.
But what exactly is bare ownership? And why might it be a formula that could be worth evaluating positively?
What is bare ownership
In order to define bare ownership, it may be useful to start with the definition of usufruct, i.e. that right, exercised by a person (usufructuary), to enjoy an asset (in this case, an apartment), which will be owned by the bare owner. The usufructuary will therefore be able to continue to inhabit the property in bare ownership for the entirety of his or her existence, but will not be able to change its economic destination nor neglect the need to preserve the property in a diligent manner.
From the above, it should be easier to understand that when the seller transfers the bare ownership, he is in fact transferring the ownership of the property to the buyer, but he is also retaining the possibility of using it for life.
In even simpler terms, whoever sells the bare ownership can keep the right of habitation of the property until the end of his life, with the bare owner who - therefore - while enjoying a real right on the property, will be able to fully dispose of it only at a later date.
What are the advantages of bare ownership
Although at this point of our brief guide the advantages of bare ownership should already be quite clear in relation to both parties, we can evidently share that the seller of the bare ownership could gain a benefit from such an operation because, while remaining to live in what was "his" house, he will still get the opportunity to live there until his death. After this event, the usufruct will be extinguished and will be "reunited" with the bare ownership, with the buyer who will finally have full availability of the property.
However, the advantages are also for the buyer: the latter will be able to buy a property at a reduced price compared to the market price (considering that the sale value will be net of the usufruct) and, at the seller's death, will be able to acquire full ownership.
How are the expenses divided with the bare ownership?
One of the most frequent doubts concerning the subject of bare ownership is related to the division of expenses.
Generally speaking, and unless there are different agreements between the parties, the expenses relating to the ordinary maintenance of the property in good condition are entirely the responsibility of the usufructuary. In other words, it is the usufructuary who will have to make sure that the systems work, and who will have to bear all the charges related to the decent maintenance of the property, avoiding to damage it and to modify its economic destination (unless there is no unity of intent with the bare owner).
As far as extraordinary expenses are concerned, these are at the expense of those who will have purchased the bare property. Therefore, if it proves necessary to replace the fixtures, the relative charges will be borne by the person who has purchased the property, but who is not yet able to enjoy it.
Finally, we would like to remind you that, by law, all the taxes on the property (such as IMU or TASI) are to be paid by the usufructuary: it is the Civil Code which states that whoever enjoys the material availability of the property will be subject to the payment of such taxes.
