Calculation of usufruct and bare ownership
Total value of the property = Usufruct + Bare ownership
The sale or purchase of the bare ownership means receiving or paying a lifetime annuity for the value of the bare ownership; whether you are buying or selling, we will help you.
We will help you to analyse the risks associated with the sale and purchase and advise you on how to assess them.
The importance of a fair price in calculating bare ownership and usufruct
The economic agents, the buyer and seller, act reasonably, following the advice from professionals, in order to assess the random operation and the advisability of assuming the longevity risk or not.
Quibus can help you:
As an investor, to determine a fair price for the sale and purchase transaction by means of a lifetime annuity.
As the owner of the property, to determine the monthly pension to be received in the sale and purchase transaction.
Actuarial services for sale and purchase involving bare ownership and usufruct
We can help and advise you with the calculation of a fair price for the bare ownership and usufruct. Contact us.
Example of the sale of bare ownership for a lifetime annuity
Juan owns a property valued at 500,000 € and is interested in selling it in exchange for receiving a lifetime annuity income and remaining in his home. María, on the other hand, is interested in investing in the purchase of the bare ownership and agrees to Juan continuing to live in his home.
For this transaction, María and Juan have hired Quibus to determine the value of the lifetime annuity income that María should pay Juan for the bare ownership.
Our expert actuaries make the relevant calculations to determine the fair price for the bare ownership, taking into account: the price of the property, Juan’s age and life expectancy, among other values.
They also consider the current interest rate to mitigate inflation over the coming years. Using these data, they calculate the current value of the future payments of the lifetime annuity income that María has to pay Juan as long as he lives.
In the end, they determine that the appropriate amount for the lifetime annuity is 2,500 € a month. María and Juan agree with this value and proceed to sign the bare ownership sale and purchase contract.
In this example, the actuary plays a key role by determining the fair value of the lifetime annuity income that María has to pay Juan. The actuary’s experience and skill concerning the calculation of the lifetime annuity guarantee that both parties receive fair and equitable treatment in the bare ownership transaction.
Frequently asked questions about the calculation of bare ownership and usufruct
How is the value of the lifetime annuity for bare ownership calculated?
How can I know if the purchase or sale of a property by means of a lifetime annuity is a good investment?
What are the main advantages of the sale or purchase of a property by means of a lifetime annuity?
We recommend that both parties consult our expert actuaries about the operation in order to achieve a fair price.