Bare ownership sales in Spain present financial risks for elderly homeowners

The sale of bare ownership (nuda propiedad) is an increasing real estate practice in Spain, allowing elderly homeowners to receive immediate capital while retaining the right to live in their property for life (usufruct).

While this legal mechanism provides a way to supplement low pensions, it requires careful scrutiny of contract terms. Key considerations include the allocation of property expenses such as taxes, community fees, insurance, and repairs, as well as the ability to rent the property if the owner eventually moves into a care facility.

A specific case in Cádiz highlights the financial complications of this arrangement. An 82-year-old woman, who sold her home to fund 24-hour care, was required to pay approximately 6,700 euros in local capital gains tax (plusvalía) to the Cádiz City Council. Critics argue that while the central government exempts those over 65 from certain state taxes, local administrations should offer similar relief or bonuses for elderly citizens in social need who sell property under these circumstances.