Buying bare ownership in France: discount, IFI, end

How it works: a temporary usufruct

Article L253-1 of the Construction and Housing Code provides that “the usufruct of a dwelling or group of dwellings may be established by agreement in favour of a legal entity, for a minimum term of fifteen years, with a view to letting”. The following articles regulate this arrangement, known as usufruit locatif (rental usufruct):

• the convention d’usufruit (usufruct agreement) divides expenses between bare owner and usufructuary; during the agreement, the usufructuary alone pays the service charge instalments for the copropriété (co-owned building) that fall to it (art. L253-1-1, I);
• in a copropriété, the usufructuary is by law the joint representative (mandataire commun) and votes alone on decisions whose cost it bears (art. L253-1-1, II);
• the agreement specifies how charges are divided on its expiry and the adjustments after the end of the usufruct (art. L253-1-1, III).

For the general rules of split ownership, see our guide on usufruit et nue-propriété (usufruct and bare ownership).

The price: where the discount comes from

The bare owner pays only a fraction of the home’s value: the difference corresponds to the rents they forgo in favour of the usufructuary for the duration of the split. This discount is set by the sale contract; no legislation imposes its level, and no official source publishes a range for it.

For tax purposes, article 669, II of the CGI values a usufruct established for a fixed term at “23% of the value of the whole property for each ten-year period”, regardless of the usufructuary’s age. This scale is used to calculate registration duties; it says nothing about the market price.

Comparing a discount with a rental yield means taking into account what the bare owner does not pay during the split (service charge instalments, letting management, and the other expenses the agreement places on the usufructuary) and what they recover at the end: a home that has aged at least 15 years.

Tax during the split

IFI. As a general rule, it is the usufructuary who declares the property for IFI at its full-ownership value; the bare owner “must not declare it” (service-public.gouv.fr, F563). The BOFiP (official tax guidance) specifies that the bare owner, who derives no income from the property, has “nothing to declare for IFI”, apart from statutory exceptions (notably the surviving spouse’s usufruct) that do not cover this arrangement. IFI applies to net property assets of more than €1,300,000 (see our guide IFI (property wealth tax)).

Income tax. The bare owner receives no rent, so has no revenus fonciers (rental income) from this property. But the 2026 practical brochure (p. 362-363) provides for a special case: loan interest on borrowing to acquire homes whose usufruct is held temporarily by an organisme HLM (social housing body), a société d’économie mixte (semi-public company) or an approved body is deductible from the bare owner’s other rental income. The resulting deficit can be set only against rental income of the following 10 years, never against overall income. The return is made on the special form 2044 (2044 spéciale) (service-public.gouv.fr, F1991), and buildings held in bare ownership are among the special regimes that exclude the micro-foncier (simplified rental income regime) (2026 brochure, p. 158).

The end of the split

The Construction and Housing Code organises the departure of the sitting tenant:

• one year before the usufruct ends, the landlord reminds the bare owner and the tenant of the rules (art. L253-6, I);
• six months before, the bare owner may, by registered letter, offer the tenant a new lease complying with the Act of 6 July 1989 taking effect at the end of the usufruct, or give notice to sell or to occupy the property (art. L253-5);
• three months before, the landlord offers suitable rehousing to a tenant who has not signed a new lease and meets the income conditions (art. L253-6, II);
• the lease granted by the usufructuary ends automatically at the latest when the usufruct ends (art. L253-4).

For tax purposes, the merger of the usufruct with the bare ownership on expiry of the fixed term “gives rise to no tax or duty” (CGI, art. 1133).

Reselling: capital gain and liquidity

If the property is sold after the split ends, the plus-value immobilière (property capital gain) is calculated as follows according to the BOFiP:

• purchase price: where the usufruct was recovered on expiry, its price is in principle zero, but it is accepted that the market value of the full ownership at the date the bare ownership entered the owner’s assets may be used;
• holding period: it runs from the first of the two acquisitions, i.e. the purchase of the bare ownership.

Reselling before the end of the term is legally possible, but the buyer will likewise obtain only the bare ownership, with no income until the term: the market for these properties is narrower than for vacant homes, which can lengthen sale times and weigh on the price. The capital is not guaranteed: the home’s value at the end of the term depends on the local market and the property’s condition.

Which professional to consult

The notaire (notary) handles the deed of purchase of the bare ownership; have them review the usufruct agreement (term, division of charges, condition of the home on return). A courtier en crédit (mortgage broker) can finance the purchase, bearing in mind that the property produces no rent while the loan is repaid. As the term approaches, the agent immobilier (estate agent) values the property with vacant possession and handles re-letting or the sale.