In Belgium

Temporary bare ownership is a variation of bare ownership where the usufruct has a fixed term rather than being lifelong. At the end of the agreed period, the bare owner automatically becomes full owner.

This structure is commonly used for tax planning between a company and its manager/owner:

  • The company acquires the temporary usufruct (e.g. 20 years) and can deduct the property as a business expense
  • The manager acquires the bare ownership at a reduced cost
  • After 20 years, the manager becomes full owner without additional purchase

How it works

Valuation. The usufruct value depends on the duration of the temporary usufruct. A 20-year usufruct on a property rented at 12,000 EUR/year, capitalised at 4%, represents approximately 163,000 EUR. The bare ownership value is the full value minus the usufruct.

Tax scrutiny. The Belgian tax authorities closely scrutinise company-manager usufruct constructions. The split must reflect economic reality: the usufruct price must be justified, and the company must actually use or rent the property.

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Good to know
The FPS Finance has issued guidelines on the valuation of temporary usufructs. An overvaluation of the usufruct (reducing the bare owner’s cost) can be reclassified as a disguised benefit in kind, triggering additional taxation and penalties.

Practical example

Dr. Janssen’s company acquires a 20-year usufruct on a medical practice building for 200,000 EUR. Dr. Janssen personally acquires the bare ownership for 150,000 EUR. The company uses the building for 20 years, deducting the usufruct over that period. After 20 years, Dr. Janssen becomes full owner of a 350,000 EUR building, having paid only 150,000 EUR personally.