Split purchase: bare ownership and usufruct

Split purchase: bare ownership and usufruct

If you are considering having your company purchase a building, split purchase might be a solution as it offers more advantages than disadvantages when well-structured.

The split purchase divides ownership: bare ownership is acquired privately, while usufruct belongs to your company. This approach ensures your company’s use of the building for the duration of the usufruct, typically between 20 and 30 years.

The advantage of split purchase for you, privately, means less financing on your part as your company reduces your initial investment.

At the end of the usufruct, you regain full ownership without tax implications if the initial conditions are well respected throughout the entire duration.

For your company, the usufruct can be amortized, as well as registration rights.

To avoid disadvantages associated with split purchase, a correct evaluation of the usufruct is necessary to prevent any tax disputes.

Ordinary maintenance work is the responsibility of the usufructuary, while major repairs are for the bare owner or may be shared between the usufructuary and the bare owner.

The method of evaluating the usufruct is not fixed, but it is essential to be able to justify this evaluation to comment on the choices made in the event of a dispute with the tax authorities and to confirm to the latter that the updated rents received by the usufructuary will indeed replenish the initial capital.