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Since its creation in 2010 by Jérémy Louis, an estate agent and notary graduate, the New Deal Immobilier network has maintained its promise to provide quality services to its customers, with personalised follow-up while preserving a human approach.
In 2020, our network evolved towards a family atmosphere, consolidating its expertise at the same time with the arrival of Laëtitia Setto, an excellent lawyer who had practised for 10 years as a notary.
With our experience and expertise in dismantling, you can look forward to investing in bare ownership with complete peace of mind.
Often used as part of a gift to children, ownership stripping also offers a number of advantages when selling property. Bare ownership is a profitable and secure property investment.
As well as the tax benefits, investing in bare ownership avoids some of the problems that can arise when buying property on a traditional basis and letting it out.
The principle behind this type of investment is simple. The bare owner owns the property without the usufruct, which is temporarily retained by the usufructuary. For a certain period, the usufructuary has the right to use or rent the property. At the end of the usufruct period, the bare owner recovers full ownership.
This arrangement offers a number of advantages:
- Taxation at the time of purchase
Buying bare ownership offers tax optimisation at the time of purchase. Unlike an ordinary sale, the buyer will only pay transfer taxes on the value of the bare ownership and not the full ownership.
For example, the purchase of an old property in full ownership with a value of €300,000 will incur transfer costs (known as notary's fees) of around €20,500.
The same property purchased in bare ownership with a 17-year usufruct reserve will be valued at 60% of its market value, i.e. €180,000. Transfer costs will be based on this value and will therefore be €13,000. In this example, the buyer will have saved €7,500 in transfer costs at the time of purchase.
- Taxation on recovery of the usufruct
At the end of the usufruct period, the bare owner recovers full ownership on a tax-free basis.
- No formalities or costs when reclaiming usufruct
The end of the usufruct automatically results in the transfer of the usufruct to the bare owner, with no formalities or costs. There is no need to go before a notary. In fact, your full ownership will be enforceable against third parties because, at the time of purchase, the notary registers the end of the usufruct with the land registry.
- Exemption from capital gains tax when the usufruct is reclaimed
The benefits of buying a property in joint ownership are all the greater when the investment is made in an attractive sector. The potential capital gain does not affect the recovery of the usufruct, which is exempt.
- Reducing wealth tax
From a purely tax point of view, bare ownership does not form part of the assets of the bare owner. This means a significant reduction in wealth tax, since such an acquisition will remove the entire investment from the estate. A purchase worth €200,000 will reduce the ISF tax base by the same amount.
- Avoiding tax on property income
The principle is simple: buying bare ownership means receiving all the rental income for the usufruct period in advance, by deducting it from the price of full ownership. As well as being 'paid' less in advance, this is not officially rent and is therefore not subject to property income tax. A traditional rental investment involves an initial outlay of 100% of the value of the property, in return for which the rental income will be taxed.
- Deduction of loan interest
Financing a bare-ownership property that is rented out allows the bare owner to deduct the interest on the loan from his or her property income.
- Low initial outlay with leverage
An investment in shared ownership involves a lower initial outlay than a traditional property purchase. Purchasers create an asset with a lower investment, for example by buying a property at 60% of its value.
What's more, no annuity is payable to the usufructuary.
- No risks
The bare owner is not subject to the uncertainties that can affect any landlord, such as non-payment of rent, changes of tenant or vacancies between tenancies.
Usufruct can be either life-long, meaning that it expires on the death of the usufructuary (if the usufructuary is an individual), or term-based, meaning that it expires on a set date. In the latter case, there is no risk similar to that of a life annuity sale, except to the benefit of the bare owner. This is because, unless otherwise agreed, the bare owner recovers full ownership on the death of the usufructuary before the term initially agreed.
- No taxes or charges during dismemberment
The usufructuary remains liable for property and housing taxes. The same applies to co-ownership charges. As far as the distribution of works is concerned, unless otherwise specified, the bare owner is responsible only for work on the shell. However, the dismemberment contract may stipulate that all works are to be borne by the beneficial owner.
- Refurbishment of the property
Some dismemberment contracts require the usufructuary to restore the property to its original condition at the end of the usufruct period.
- Resale at any time
Like a life annuity, it is possible to resell bare ownership before the usufruct has expired. In this case, the value of the bare ownership will have increased because the usufruct will have expired sooner.
