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Freehold vs. Bare ownership: What's the difference?


Full ownership of a home is the union between bare ownership and usufruct. Bare ownership is the right of a person over a thing of which he is the sole owner, with the limitation of not having the right to its possession and enjoyment, which will be the rights of the third party that has the usufruct. Therefore, the usufruct is the right of enjoyment, use and enjoyment of someone over a home.

There are several differences between full ownership and bare ownership, including obligations, the purchase and sale of the property and its expenses. A freehold owner will have no obligations with respect to the usufructuary, while a bare owner will have to meet certain obligations such as taking charge of extraordinary repairs to the home and respecting the right of the usufructuary.

As regards the purchase and sale and rental, when acquiring a home, the usual thing is that the property is purchased and the use of it, that is, that full ownership of the home is acquired. However, in bare ownership transactions in which full ownership is not held, only the property is sold. This can have advantages for both the seller and the buyer. The sale of the bare property can offer the owner more than 60% of the value of the property. The percentage varies depending on the age of the owner, the amount of the apartment and the province in which it is located. A 70-year-old person could receive 61% of the home's value, while a 95-year-old homeowner could receive 84%. This possibility, as well as others such as the reverse mortgage or life rent, are options that are increasingly in demand among people of retirement age.

For example, in Madrid, a 95-year-old person, owner of a flat valued at 585,000 euros, could receive 561,500 euros, while a 65-year-old person with a flat of the same value would receive 462,200 euros.

However, it is important to have the advice of a real estate appraisal expert since it is not easy to make an estimate and it depends on multiple factors.

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