Skip to main content
Practical Income Manual 2022.

Constitution of usufruct

USUFRUCT ON REAL ESTATE Personal Income Tax . Table II
Ways to establishOwner who constitutes the usufructPerson in favor of whom the usufruct is established

In favor of a third party

The dismemberment of the full domain into bare ownership and usufruct occurs. The owner creates “ex novo” the right of usufruct that did not previously exist, so it is not transmitted, but rather constituted.

For consideration

By acts inter vivos (sale by price)

Real estate capital returns ( Personal Income Tax ):

  • It is important that the person in favor of whom the right is created is satisfied in all respects.

    If the person in favor of whom the right is established is the spouse or a relative, including relatives, up to the third degree inclusive, the total net income may not be less than the imputed income derived from said property (article 85 Law of the Personal Income Tax ).

  • If it constitutes a lifetime usufruct in favor of the third party, the 30% reduction may be applied for returns obtained in a notoriously irregular manner over time. [article 23.3 of the Personal Income Tax Law and 15.c) of its Regulations].

The holder of the usufruct right (and not the bare owner) is the one who has the right to use and enjoy and receives the fruits of the property, for which reason the following income is attributed to him in Personal Income Tax :

A. If you lease or transfer the property: Returns on real estate capital .

To calculate the net return on real estate capital, it must be taken into account that the tax-deductible amortization is that which corresponds to the right of usufruct [article 23.1.b) of the Personal Income Tax Law and 14.3 of its Regulations], which will be:

  • Temporary usufruct: acquisition cost between the number of years of duration
  • Usufruct for life: 3% of the acquisition cost satisfied

B. If the property is at your disposal and is not rented or transferred: Imputation of real estate income .

  • 2%, in general. This percentage must be applied to the cadastral value of the property that appears on the IBI receipt for the year.
  • 1.1% in the following assumptions:

    1. Properties whose cadastral values have been reviewed, modified or determined through a general collective valuation procedure, in accordance with cadastral regulations and have come into force in the tax period or within the ten previous tax periods.
    2. Properties that, on the date of accrual of Personal Income Tax (normally, December 31), lacked a cadastral value or this value has not been notified to the owner.

Free of charge

a. By acts inter vivos

b: By acts mortis causa:

- Intestate succession (widow usufruct)

- Will

A. If it can be proven that the constitution of the usufruct was gratuitous or if the usufructuary was taxed in the ISD due to the creation of the usufruct right

By acts inter vivos (donation) : obtains income from real estate capital that, when free of charge, is limited to the imputation of the net income provided for in article 85 of the Personal Income Tax Law during each of the years of usufruct duration .

B. By mortis causa: They do not pay Personal Income Tax .

If it cannot be proven that it was free of charge

Unless proven otherwise, it is presumed that the constitution of the right of usufruct is remunerated (article 6.5 Law of Personal Income Tax ) so it gives rise to obtaining capital returns real estate , which must be valued, in accordance with article 40 of the Personal Income Tax Law , at the normal market value, without prejudice to the application of the rules of minimum return in the case of constitution of the usufruct in favor of the spouse or a relative, including relatives, up to the third degree inclusive (article 24 of the Personal Income Tax Law ) or the application 30% reduction for income obtained in a notoriously irregular manner over time in the case of lifetime usufruct (article 15 of the Personal Income Tax Regulations ).

This table is for informational purposes only.