How do you gift the bare ownership of a property and keep the usufruct?
Gifting the bare ownership and keeping the usufruct lets you go on occupying or renting out the property while passing it on at reduced cost: tax applies only to the bare ownership, valued by the usufructuary's age (Article 669 of the French General Tax Code). On death, the usufruct rejoins the bare ownership tax free (Article 1133).
How split ownership works
Split ownership (démembrement) divides property rights in two: the usufruct, which gives the right to use the property and collect its income (Article 578 of the French Civil Code), and the bare ownership, which is destined to become full ownership when the usufruct ends. By gifting the bare ownership with a reserved usufruct, the donor therefore keeps living in the property, or collecting its rent, for life.
The gift of the bare ownership of a property must be received by notarial deed, on pain of nullity (Article 931 of the French Civil Code), and registered with the French land registry.
The statutory scale of Article 669 of the CGI
Gift tax is calculated only on the value of the bare ownership, set by a statutory scale based on the usufructuary's age at the date of the deed: the younger the donor, the more their usufruct is worth and the lower the taxable bare ownership.
Example: for a 65-year-old donor, the bare ownership represents 60% of the property's value. On a 300,000 € property, tax is calculated on 180,000 €, which leaves, after the 100,000 € direct-line allowance, a taxable base of only 80,000 €.
Under the scale of Article 669, I of the French General Tax Code, the lifetime usufruct is worth 90% of the full value (bare ownership 10%) when the usufructuary is under 21; 80% (bare ownership 20%) under 31; 70% (30%) under 41; 60% (40%) under 51; 50% (50%) under 61; 40% (60%) under 71; 30% (70%) under 81; 20% (80%) under 91; and 10% (bare ownership 90%) beyond 91.
| Age of the life tenant | Value of the life interest | Value of the bare ownership |
|---|---|---|
| Under 21 completed years | 90% | 10% |
| Under 31 completed years | 80% | 20% |
| Under 41 completed years | 70% | 30% |
| Under 51 completed years | 60% | 40% |
| Under 61 completed years | 50% | 50% |
| Under 71 completed years | 40% | 60% |
| Under 81 completed years | 30% | 70% |
| Under 91 completed years | 20% | 80% |
| Over 91 completed years | 10% | 90% |
Statutory scale for a lifetime interest by age of the life tenant (Article 669, I of the French Tax Code)
On death, full ownership is rebuilt tax free
When the usufructuary dies, the usufruct is extinguished and the bare owner automatically becomes full owner, with no inheritance formality for that property: the reunion of the usufruct with the bare ownership through the usufructuary's death, or the expiry of the agreed term, triggers no tax (Article 1133 of the French General Tax Code).
The saving is twofold: tax is paid once only, on the bare ownership alone, and the value gained by the property between the gift and the death also escapes transfer tax.
The trap of the presumption in Article 751 of the CGI
Article 751 of the French General Tax Code presumes that a property whose usufruct the deceased had kept, and whose bare ownership is held by one of their presumptive heirs, belongs to the estate in full ownership. Without precautions, the property would therefore be brought back into the estate and taxed in full on death, as if the split had never existed.
This presumption is set aside where there was a regular gift made more than three months before the death (or recorded in a marriage contract), or where evidence of the genuineness of the arrangement is produced: one more reason to formalise the gift before a notaire without delay. Caution is also required for so-called acquisition splits, where the parent buys the usufruct and the child the bare ownership: the child must be able to prove that they financed their share with their own funds.
Frequently asked questions
Who pays the property tax and the works when ownership is split?
The usufructuary bears the annual charges, including the French property tax (taxe foncière), and routine maintenance repairs (Articles 605 and 608 of the French Civil Code, Article 1400 of the CGI). Major structural repairs defined by Article 606 of the Civil Code (main walls and vaults, replacement of beams and entire roofs, retaining and boundary walls in full) fall to the bare owner, unless agreed otherwise.
Can a property with split ownership be sold?
Yes, but only with the agreement of both the usufructuary and the bare owner. The price is then shared according to the respective value of each right, unless the parties agree to carry the split over to the sale price or to a replacement property.
Does the bare owner pay the French real estate wealth tax (IFI)?
No, in principle: the usufructuary declares the property for IFI at its full ownership value (Article 968 of the French General Tax Code). By exception, notably where the surviving spouse's usufruct arises directly from the law, the tax is shared between usufructuary and bare owner according to the scale of Article 669.
What happens if the bare owner dies before the usufructuary?
The bare ownership falls into their own estate and passes to their own heirs, with transfer tax applying. The donor's usufruct is unaffected: it continues until the donor's own death.
Read next
- Code général des impôts, article 669 (Légifrance)
- Code général des impôts, article 751 (Légifrance)
- Code général des impôts, article 1133 (Légifrance)
- Code civil, articles 578, 605 et 606 (Légifrance)
- Service-Public.fr : Usufruit et nue-propriété
A question about your plans?
Realistic price, order of the steps, agency fees on a sale. Book a video call with a BRIVEO adviser, free and with no commitment.
Talk to a property adviser