Selling the Bare Ownership and Keeping the Usufruct: the Alternative to an Equity-Release Mortgage (2026 Guide)

What selling the bare ownership actually means

Ownership of a Spanish home can be split into two separate rights in rem:

• The usufruct (Arts. 467 ff. of the Civil Code): the right to use the property and take its fruits — to live in it or let it out — without being the full owner.
• The bare ownership (nuda propiedad): "naked" title with no use or enjoyment, which consolidates into full ownership when the usufruct ends, normally on the death of the usufructuary (Art. 513.1 CC).

In the transaction analysed here, the owner sells the bare ownership to a third party — a private investor, a family office or a specialist company — and reserves a lifetime usufruct. They receive a cash price, stay in their home for life, and the buyer acquires full ownership, with nothing further to pay, when the usufruct ends.

In 2025 Spain recorded 1,798 bare-ownership sales of homes. That is small against the wider market, but it is growing steadily, especially along the Mediterranean coast. In Torrevieja, Orihuela Costa and Moraira the typical profile is a retired foreign owner with a mortgage-free home, a modest pension and no heirs living in Spain.

Why it is gaining ground on the equity-release mortgage

The hipoteca inversa (First Additional Provision of Act 41/2007) is a mortgage-secured loan for people over 65, or with recognised dependency or disability: the bank pays a lump sum or a monthly income and nothing is repayable until death, when the heirs must settle the accrued debt plus interest or sell the property.

The key difference is one of legal nature:

> Selling the bare ownership is a definitive transfer: no debt, no interest, nothing left for the heirs to deal with. An equity-release mortgage is a loan: the debt compounds every month and passes in full to the estate.

Head-to-head comparison

| Feature | Bare-ownership sale | Equity-release mortgage |
|---|---|---|
| Legal nature | Sale (definitive transfer) | Mortgage-secured loan |
| Who owns the home | The buyer, from completion | The borrower keeps title |
| Right to live there | For life, via a registered usufruct | For life, while the contract holds |
| Money received | Single lump sum | Lump sum, monthly income or a mix |
| Typical amount | 45 % – 75 % of market value, by age | 15 % – 45 % of valuation, by age |
| Interest | None | Yes, compounded until death |
| Debt left to heirs | None | Accrued debt; pay it or sell |
| Minimum age | No legal minimum | 65 (or recognised dependency/disability) |
| Reversible | No, unless a buy-back is agreed | Yes, by repaying the loan |
| Seller's income tax | Capital gain, exempt if over 65 and it is the main home | Not taxable (it is debt, not income) |
| Transaction taxes | 9 % transfer tax in the Valencian Region (buyer pays) + municipal plusvalía | Stamp duty (often relieved or exempt) |
| Running costs | Split by law between usufructuary and bare owner | All borne by the owner |
| Main risk | Losing the family asset; below-market price | The debt can exceed the property value |

Rule of thumb: if the goal is maximum cash now with no debt, the bare-ownership sale usually wins. If the goal is keeping the property in the family and only topping up income, the equity-release mortgage — or even letting part of the home — fits better.