Home Reversion

What is a Home Reversion plan?

Home reversion is a type of Equity Release that allows you to sell your home in return for a cash lump sum, a regular income, or both. Your property then belongs to someone else. However, you’re allowed to carry on living in it until you die, paying no rent.

Home Reversion In Spain

Under Spanish Law, the seller transfers a part of the property named “bare ownership”, while keeping the right to use it. This “bare ownership” legal concept refers to a person or entity that owns the absolute ownership right to a property, including the right to sell or transfer the property. However, in the case of “bare ownership” the owner does not have the right to use or enjoy the property.

The seller receives a price, usually paid in full on the day of the contract signing. Following the seller’s passing, the buyer/investor assumes ownership of the property. In essence, this transaction enables the seller to access liquidity while retaining the opportunity to remain in the property.
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How does a Home Reversion plan work in Spain?

A Home Reversion is a type of Equity Release. In Spain it is a legally binding transaction conducted before a notary, whereby the homeowner (typically an elderly individual) sells the bare ownership of their property in exchange for a lump sum payment upon signing the agreement. The homeowner retains the right to use and occupy the property rent free until their passing, allowing them to continue residing.

Unlike a Lifetime Mortgages, through the sale of the bare property:

  • You will also have the opportunity to access liquidity, although this transaction is irrevocable, and upon the owner’s passing, the property will not be inherited by the heirs.
  • You will keep the right of use and enjoyment, but not the full ownership.
  • Through a home reversion, you will be relieved of the financial obligations associated with the property, including community fees, property taxes (IBI), and other related expenses.

Home Reversion payment options

A home reversion can be formalized in exchange for:


This option involves the sale of “bare ownership” while retaining lifetime usufruct. The seller receives a lump sum payment, and the buyer acquires the property at a discounted price based on the projected duration of the arrangement.

Life Annuity:

In this transaction, the seller sells the property but retains the right to use it for life. In return, they receive a monthly payment based on the property value and life expectancy. The higher the property value, the higher the monthly payment. This transaction is commonly known in spanish as Renta Vitalicia Inmobiliaria.

Temporary Income:

In this option the seller transfers the bare property and maintains right of use for life, in exchange fixed  income for a period of time. This option enables the seller to receive a larger amount than the previous options, however for a shorter period.

Eligibility Criteria

As a general rule, you must be over 75 years of age and have a well-located property, preferably in a provincial capital.

How could I do a Home Reversion in Spain?

Now that you are familiar with the concept of a home reversion, discover the benefits of a home reversion with Optima Mayores. We offer expert guidance, handle all paperwork, and secure the best offer for your property sale. Trust us for a seamless and rewarding experience.

What are the tax implication of a home reversion?

A home reversion entails the payment of the following taxes:

1. Plusvalía Municipal (IIVTNU – Impuesto sobre el Incremento de Valor de Terrenos de Naturaleza Urbana). This refers to a council tax, the amount of which is determined by the number of years since the property was purchased and the cadastral value of the land.

2. IRPF (Capital Gains Tax). If the transaction is conducted on the primary residence and you are over 65 years old, you are exempt from paying this tax. This tax pertains to the capital gain resulting from the sale of the bare property, which is calculated by subtracting the purchase price from the sale price.

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