Purchasing bare property allows you to build on your wealth at a lower cost, anticipate your retirement income, optimize your taxation, or prepare for its transfer.
What is the principle for a bare property purchase?
You buy the bare ownership of an apartment whose usufruct is acquired by a third person, for a period between 10 and 20 years, depending on the marketed programs.
What are the advantages of a bare property purchase?
An attractive price
Buying bare ownership allows you to build real estate assets at a lower cost, with a reduction on the purchase price of approximately 40% compared to the same property acquired through full ownership .
Absence of property tax and outlays for bare owner
The usufructuary is responsible for renting the property and provides maintenance repairs to the building (private and common areas). It should be noted that major repairs are the responsibility of the bare owner (article 605 and 606 of the Civil Code).
Full-ownership without no costs or taxation at the end
At the end of the dismemberment period, you shall get the full ownership of the property, without the need to pay additional money.
Property income exempt from taxation
During the entire dismemberment period, the operation has no effect in terms of income tax, since you do not collect the rents of the rental accommodations. In the case of an acquisition on credit, the loan interest is deductible from other property income, provided that the usufructuary is a social landlord or a landlord liable to income tax.
Reduce IFI base
The usufructuary must declare the property in his taxable heritage, provided it’s subject to the IFI. He is then liable for the IFI on the full ownership of the property. During the entire dismemberment period, the bare owner isn’t taken into account, to assess his taxable assets with the IFI On the other hand, debts relating to bare ownership can no longer be deducted from the assets, which are taxable with IFI, since the corrective finance law for 2013 (article 885 G quater CGI)
Transfer at lower tax cost
If you want to transfer the property to your heirs, to the extent that only the bare ownership will be passed on to them, the donation rights will be calculated solely on the value of the latter.
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