Lawyer Raymundo Larrain briefly explains how to cash in on your property, releasing the pent-up equity. This is attained on selling the bare ownership of your property and retaining a usufruct right.
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By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of July 2022
It has become apparent that we have fallen on hard times. The ongoing war in Europe (which threatens contagion to neighbouring countries), the unbridled two-digit inflation, tax hike, hike in petrol, hike in electricity & gas, the ongoing Covid-19 restrictions, and more all add up to our woes!
But none fair harder than those in their twilight years. They are hands down the most affected collective with all that is going on.
Many senior citizens struggle to get by on low pensions given the unrestrained rise of prices (two-digit inflation!). All they know is that after a life of hard work and sacrifices they can afford every month fewer things on the same fixed income (pension).
But precisely, because of their age, they can turn this round to their advantage. Seniors are likely sitting on properties which value has gone up substantially over the previous years. Property prices in Spain have appreciated for eleven consecutive months, hitting all-time highs in some cities, such as Madrid. Property sales are at the highest numbers since 2007.
Moreover, in a high inflationary context, money experts strongly advise investors to buy property (tangible assets) to hedge themselves against rising inflation, so their property values are bound to increase even further over the next years, interest rate fluctuations notwithstanding.
What’s the point of living in a 500k property if you can’t treat yourself to fancy restaurants, from time to time, or even book some luxury holiday abroad? Or maybe you need to release equity to finance an expensive medical treatment for your loved ones.
It is my experience that elders often live in a permanent disconnection between what their properties are valued at and their spartan lifestyles, often struggling silently to get on by on low pensions. In this month’s article, I shed light on a legal method that reconciles both, allowing seniors to take full advantage of their real estate, opening their locked wealth by allowing them the freedom to enjoy life as they deserve in their twilight years, without struggling every month to make ends meet.
Unbeknownst to them, there is legal a way to tap into their build up wealth without needing to sell their property, much less leave their home!
This is known as selling the ‘bare ownership’ to an investor whilst retaining a ‘life usufruct’ on the property. This is a legal procedure witnessed by a notary. In simple terms, bare ownership grants ownership of a property but does not grant possession.
Selling the bare ownership is a (very) smart way of cashing in on the accumulated wealth of your property without relinquishing your lifestyle. Because in truth, you won’t notice any difference other than sitting on a large pile of money! You will still live in the same property for the remainder of your life.
This procedure is ideal for senior citizens who are asset rich, but cash poor.
For a seller, it’s a win-win as you get to keep your property (whilst you live) and you also have access to a large pile of cash with which you can do as you please.
For an investor, it is a win-win as they get to buy a property below the market value (BMV) and also do not pay inheritance tax or plusvalia tax on receiving the possession of the property in the future.
If you have grown tired of struggling financially every month, and wish to put an end to your endless nightmare, just give us a buzz. Our friendly staff will guide you through the procedure.
We can advise and represent you, to secure it, and sign the notary deed. Your only concern going forward will be what to do with so much money in your bank; it will be up to you!
Larraín Nesbitt Lawyers, small on fees, BIG on service.
Larraín Nesbitt Lawyers is a law firm specialized in conveyance, taxation, inheritance, residency, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at email@example.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.
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