The usufructuary has the right to enjoyment and use of the property but it is not the owner. Attention: do not confuse usufruct and right of use and habitation.
What does usufruct mean?
Let us take a house as an example. You need to remember that a right of ownership gives an owner three types of prerogatives:
- the right to use the property (i.e. live in it),
- the right to receive income from the property (i.e. rent it),
- the right to dispose of the property (i.e. sell it).
But an owner can divide these prerogatives into two groups:
- on the one hand there is the usufruct which includes the right to use the property and receive income from it
- on the other there is the bare ownership which is the usufruct encumbered property
The right of ownership is therefore a combination of the usufruct and the bare ownership .
Usufruct is most commonly for life, i.e. is extinguished with the death of the person holding it. It may also be constituted for a set term; this is known as temporary usufruct. The person who holds the right to use the property and receive income from it is known as the usufructuary. But selling the housing can only be done with the agreement of the usufructuary and the bare owner.
You should not confuse usufruct with the right to use and occupy. The right to use and occupy is strictly personal and limited to living in a property (without the right to let it). Usufruct is a property right that may apply both to real estate and movables (e.g. portfolio of shares).
How to calcultate usufruct?
If, for example :
- the usufructuary and the bare owner agree to sell the property, how should the proceeds of the sale be divided between them ?
- your parents give you the bare ownership of an apartment, what value will the authorities tax you on ?
The question of valuing usufruct and bare ownership (the two are linked, of course) is therefore very important. A tax scale is necessary to calculate the rights due by the usufructuary and / or the bare owner in the event of donation , succession, sale, exchange, contribution in company.
|Age of the usufructuary||Value of the usufruct as a percentage
of the value of the full ownership
|Up to 20 years||90%|
|21 to 30 years||80%|
|31 to 40 years||70%|
|41 to 50 years||60%|
|51 to 60 years||50%|
|61 to 70 years||40%|
|71 to 80 years||30%|
|81 to 90 years||20%|
|Over 91 years||10%|
The parties may, in their relations, use this scale. But the principle is that they must evaluate the usufruct on a case-by-case basis (this is called an "economic usufruct") taking into account the life expectancy of the usufructuary and the rate of return of the usufructuary. well.
In case of set-term usufruct (temporary usufruct), usufruct is estimated as 23% of the value of the full ownership for each complete ten-year period (23% from 0 to 10 years old, 46% from 11 to 20 years old and 69% from 21 to 30 years old).
Do not forget that the tax authorities value the right to use and occupy at 60% of the value of the life usufruct.