Extinction of usufruct and consolidation of ownership

Upon death of the usufructuary if not successive (lifetime usufruct)⁽¹⁾

Automatic consolidation of the domain in the owner node

In the extinction of the usufruct and subsequent consolidation of the domain, the IRPF that corresponds according to the title of constitution of the usufruct will be required.

• For onerous transmission: will be taxed by the Property Transfer Tax (ITP). The bare owner is required to make a settlement for the value of the usufruct that enters his/her assets, which is the result of applying to the new value that the property may have at the time of consolidation of ownership, the percentage that corresponded to the usufruct at the time of dismemberment, for which he/she has not paid the tax. However, if the tax rate has changed since that time, the new rate in force at the time of consolidation applies.
• By lucrative transmission: will be taxed by the Inheritance and Gift Tax (ISD) by applying the average effective tax rate corresponding to the dismemberment of the domain, and based on the value that the usufruct had at that time (at the time of the dismemberment of the domain).

It does not pay taxes in the IRPF due to consolidation . The owner who consolidates the domain will obtain real estate capital returns if he rents or transfers the property or imputes real estate income (unless it becomes his habitual residence)

Automatic consolidation of the domain in the owner node

Consolidation of the domain in the owner node

A capital gain or loss is generated in the IRPF for the difference between the transfer value and the acquisition value (See transfer and acquisition value in the transfer of usufruct)

The renunciation of a usufruct already accepted, even if it is pure and simple, will be considered for tax purposes as a donation from the usufructuary to the bare owner.

Abatement coefficients ( DT 9 of the Personal Income Tax Law ): They will not apply, to the extent that it would not be a transfer of an asset, but rather a waiver of a right, regardless of whether it implies the consolidation of full ownership in the bare owner.

Consolidation of ownership in the usufructuary or in the bare owner derived from a legal transaction (by donation or by onerous transfer)

• If the usufructuary transfers his right to the bare owner: You will obtain in the IRPF a capital gain or loss for the difference between the transfer value and the acquisition value (See transfer and acquisition value in the transfer of usufruct)

• If the usufructuary acquires the bare ownership and consolidates the domain: The tax corresponding to the legal transaction by virtue of which the bare ownership is acquired will be required.

  • For onerous transmission: The consolidation will be subject to the Property Transfer Tax (ITP).

  • By lucrative transmission: The consolidation will be subject to the Inheritance and Gift Tax (ISD) for the concept of donation.

    In this case does not pay taxes in the IRPF due to consolidation but will obtain capital gains from real estate if he rents or transfers the property or imputes real estate income (unless it becomes his habitual residence)

• If the bare owner transfers his bare ownership to a 3rd party (the usufructuary): You will obtain in the IRPF a capital gain or loss for the difference between the transfer value and the acquisition value of the bare ownership.

• If the bare owner acquires the usufruct and consolidates the ownership. The tax corresponding to the legal transaction by virtue of which the bare ownership was acquired will be required.

  • For onerous transmission: the consolidation will be taxed by the ITP

  • By lucrative transmission: the consolidation will be taxed at ISD . The consolidation of ownership in the bare ownership will be taxed by the highest of the settlements: between the one pending due to the dismemberment of the domain and the one corresponding to the legal transaction by virtue of which the usufruct is extinguished.

    In this case, the bare owner who acquires the usufruct and consolidates the ownership does not pay taxes in the IRPF for the consolidation but will obtain real estate capital gains if he rents or transfers the property or imputes real estate income (unless it becomes his habitual residence)

Note to the table:

⁽¹⁾ The extinction of the usufruct due to the death of the usufructuary does not entail a new acquisition by the person holding the property, but rather it is the legal regime of this real right of enjoyment or use that establishes that the death of the usufructuary extinguishes it (article 513.1, Civil Code), with the owner recovering the enjoyment rights of which he had been deprived in its constitution. ^(Back)