Usufruct holder in France, bare owner abroad, how do we sell the property and share the price?
After an inheritance or a gift it is common for a parent to keep the usufruct of a home in France while a child settled abroad holds the bare ownership. Selling the full ownership requires the agreement of all, usufruct holders and bare owners, and the price is shared according to the respective value of the rights, most often under the scale of article 669 of the tax code, which depends on the age of the usufruct holder on the day of the sale, unless the parties carry the split over to the price, by quasi-usufruct with a restitution claim, or to a new property bought as a reinvestment. Each holder is taxed on their own gain, the usufruct holder who had their main residence there is exempt for their share, and the non-resident bare owner bears the 19 % levy and social levies on theirs, with a tax representative if their fraction of the price exceeds 150,000 €.
Selling together, the agreement of the usufruct holder and the bare owner
Splitting ownership separates use and income, the usufruct, from ownership of the capital, the bare ownership. Neither may sell the full ownership alone, the usufruct holder may only transfer their usufruct and the bare owner their bare ownership, which finds few buyers. The Gironde chamber of notaires points it out, selling the full ownership of a split property requires the agreement of all, usufruct holders and bare owners alike, and article 621 of the civil code provides that in a simultaneous sale the price is shared between them according to the respective value of each right, unless the parties agree to carry the usufruct over to the price.
Distance complicates nothing, each holder signs the preliminary contract and the deed by power of attorney or by remote appearance, and the sale mandate is signed by all holders, electronically with BRIVEO. What calls for a real decision is what becomes of the price.
Three ways to deal with the price
The first is splitting it. Each receives their share of the price, valued under the tax scale of article 669, which notaires use for convenience without it being compulsory, or under an economic method based on the property's yield and the usufruct holder's life expectancy. The second is quasi-usufruct, the usufruct holder receives the whole price and may dispose of it, the bare owner holding against their estate a restitution claim for the same amount, which an agreement may index. The third is reinvestment, the split is kept by buying a new property with the price, the usufruct holder and the bare owner finding their rights in it again.
The article 669 scale sets the value of the usufruct by age bracket of the usufruct holder, from 90 % of full ownership before 21 to 10 % beyond 91, the bare ownership being worth the remainder. A usufruct created for a fixed term is valued at 23 % of full ownership per period of 10 years.
| Age of the usufruct holder | Value of the usufruct | Value of the bare ownership |
|---|---|---|
| Under 21 | 90 % | 10 % |
| From 21 to under 31 | 80 % | 20 % |
| From 31 to under 41 | 70 % | 30 % |
| From 41 to under 51 | 60 % | 40 % |
| From 51 to under 61 | 50 % | 50 % |
| From 61 to under 71 | 40 % | 60 % |
| From 71 to under 81 | 30 % | 70 % |
| From 81 to under 91 | 20 % | 80 % |
| 91 and over | 10 % | 90 % |
Scale of article 669 of the French tax code
Each one's capital gain, and the holder who lives abroad
When the price is split, the transaction may give rise to a taxable gain in the name of each holder of split rights, the notaires write. The usufruct holder who occupied the dwelling as their main residence is fully exempt for their share. The bare owner is taxed on theirs, their acquisition price being the value of the bare ownership on the day they received it, by inheritance or gift, and their holding period running from that date. If they live outside France, their gain follows the non-resident rules, 19 % levy, social levies of 17.2 % or 7.5 %, holding-period allowances, and a tax representative if the fraction of the price coming to them exceeds 150,000 € outside the European Economic Area.
In a quasi-usufruct the usufruct holder receives the price, but the gain is still computed and taxed for each according to their rights, the notaires recommending that the tax burden be shared under the scale whatever the use of the price. The bare owner's restitution claim will later enter the usufruct holder's estate, which a notaire anticipates with a registered quasi-usufruct agreement.
Frequently asked questions
My mother holds the usufruct and lives in France, I am the bare owner in Canada, who pays what on the sale?
If the price is split, your mother is exempt on her share if it was her main residence, and you pay on yours the 19 % levy and 17.2 % social levies, less the allowances counted from the gift or the death that made you bare owner. The notaire withholds it all on the day of the deed.
Can we sell without the other holder's agreement?
Not the full ownership. Each may transfer their own right alone, usufruct or bare ownership, but a buyer of bare ownership burdened with a life usufruct is rare and pays little. In practice the sale is decided by both, and the fate of the price is settled with the notaire before the property goes on the market.
Which age counts for the scale?
The usufruct holder's completed age on the day of the sale. A usufruct holder who moves up an age bracket a few weeks before the deed sees her share fall by a tenth of the property's value, which can weigh on the calendar.
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