An usufruct is a right granted to a person (called the usufructuary or usufructuario in Spanish) to live in and benefit from a property that belongs to another person (the “bare owner”).
The most common cases of usufruct occur when an elderly person wants to obtain liquidity from their property without having to leave their home, or when they wish to gift the property to their heirs in advance, which can sometimes offer tax advantages. The new owners (whether investors or heirs) hold the title to the property but do not have the right to use it until the usufruct ends.
The most common type of usufruct is a lifetime usufruct, meaning it lasts for the duration of the usufructuary’s life, although in some cases a fixed term usufruct can also be agreed upon.
