By Corelex Global – Legal Advisors for International Investors

For many foreign residents in Spain, their property represents their largest financial asset. However, as retirement approaches, many homeowners find themselves “asset rich but cash poor”: they own valuable real estate but have limited liquidity to support their lifestyle, healthcare needs or long-term financial planning.

One increasingly popular solution is the sale of the bare ownership (nuda propiedad) while reserving a lifetime usufruct (usufructo vitalicio). When properly structured, this arrangement enables homeowners to release capital from their property without giving up the right to continue living there for the rest of their lives.

Although the concept appears straightforward, these transactions involve significant legal, tax and practical considerations. Without careful drafting, both sellers and buyers may be exposed to unnecessary risks.

At Corelex Global, we regularly advise international clients throughout every stage of these transactions, ensuring that the interests of all parties are fully protected.

What Is a Bare Ownership Sale?

A bare ownership sale separates ownership of a property into two distinct rights. The bare ownership (nuda propiedad)is transferred to the purchaser, while the seller retains a lifetime usufruct (usufructo vitalicio), allowing them to continue living in and enjoying the property for the remainder of their life. Although the purchaser becomes the legal owner, they cannot occupy or use the property until the usufruct expires, which usually occurs upon the death of the last surviving usufructuary. For many retirees, this provides an effective way of obtaining immediate liquidity without sacrificing the security and comfort of remaining in their own home.

Why Legal Structuring Matters

A bare ownership transaction is considerably more complex than a conventional property sale. It requires careful regulation of the relationship between the parties for many years after completion. The purchase agreement and public deed should clearly define the payment arrangements, the rights of occupation, responsibility for maintenance and repairs, the allocation of taxes and ongoing expenses, insurance obligations, the consequences of any payment default and the legal procedure once the usufruct comes to an end. Addressing these issues from the outset significantly reduces the possibility of future disputes and provides legal certainty for both parties.

A Practical Case Study

Corelex Global recently advised a retired British couple resident in Spain, on the sale of the bare ownership of their bungalow in Teulada (Alicante). The purchasers were a Dutch couple who were non-residents in Spain.

The British couple wanted to unlock part of the value of their property while preserving their right to remain in their home for the rest of their lives. The challenge was therefore to structure a transaction that provided immediate financial liquidity while ensuring that both the sellers’ lifetime occupation rights and the purchasers’ investment were fully protected.

Legal Protection for the Sellers

One of the most important objectives of the transaction was to guarantee payment of the deferred purchase price. To achieve this, Corelex Global incorporated a resolutory condition into the public deed. This clause provides that if the purchasers fail to pay two instalments, the sellers may recover ownership of the bare ownership while retaining all sums already received as compensation for the damages suffered.

A Balanced Financial Structure

The parties ultimately agreed on a purchase price of €225,000, exceeding several lower offers previously received. Rather than requiring full payment upon completion, the transaction combined an immediate payment at signing with interest-free deferred installments payable over a period of 48 months. This structure allowed the sellers to obtain the liquidity they required immediately while preserving the overall value of their property.

Throughout the negotiations, Corelex Global acted as both legal advisor and intermediary, helping balance the sellers’ need for immediate financial security with the purchasers’ financial capacity. By carefully structuring the payment schedule, the transaction remained attractive to both parties without compromising legal protection.

The Result

The transaction successfully achieved the objectives of both parties. The sellers obtained immediate liquidity while preserving their right to remain in their home through a successive lifetime usufruct, ensuring that both spouses could continue occupying the property until the death of the last survivor. At the same time, the purchasers acquired the bare ownership under a carefully structured payment arrangement that included robust legal safeguards in the event of default.

By combining thoughtful financial planning with comprehensive legal drafting, the transaction provided long-term certainty for both the sellers and the purchasers. It illustrates how a properly structured bare ownership sale can transform an illiquid real estate asset into a sustainable financial solution without requiring homeowners to leave the property that has become their home.

How Corelex Global Can Help

Selling the bare ownership of a property is an increasingly attractive option for many homeowners, particularly international clients looking to release equity while maintaining their quality of life. However, these transactions require careful legal planning and tailored contractual drafting to ensure that the rights and obligations of both parties remain fully protected throughout the duration of the usufruct.

At Corelex Global, we advise both Spanish and international clients throughout every stage of the process, from negotiating contractual terms and structuring payment mechanisms to drafting protective clauses, coordinating the notarial completion and ensuring compliance with all legal and tax obligations. With the right legal guidance, a bare ownership sale becomes much more than a real estate transaction; it becomes a carefully designed solution that combines financial flexibility with long-term legal security.

Let Us Review Your Case

Considering a bare ownership transaction in Spain? Let us review your case in a free 30-minute consultation. Contact us at hello@corelexglobal.com.

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