Valuations
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Advice & consultancyProperty advice
4 February 2025
Your company as usufructuary
Everything you need to know about a split purchase for your business
In practice, many entrepreneurs use a split purchase structure for real estate. For example, a company director may acquire the bare ownership of a property in a personal capacity, while their company acquires the usufruct. After the agreed contractual term, the usufruct expires, and the director typically becomes the full owner of the property—often without additional taxation. Because the tax authorities closely monitor these arrangements, an accurate and well-substantiated valuation of the usufruct is essential.
Would you like a usufruct valuation carried out? Rely on CC Experts as your independent appraiser.
What is usufruct?
Property ownership can be split into two components: usufruct and bare ownership. Usufruct is a temporary right to use and enjoy a property (e.g., real estate) owned by someone else, as if you were the owner, but with the obligation to preserve it. The holder of the usufruct is the usufructuary. The person granting the usufruct is the bare owner. The usufruct ends after a predetermined term or, in the case of a company, upon its dissolution. At that moment, the bare owner automatically becomes the full owner of the property.
Key takeaways
Right of use: The usufructuary may use the property as if it were their own, with the obligation to maintain it properly. In addition, the usufructuary is entitled to any rental income the property generates.
Obligations: The usufructuary is responsible for the day-to-day upkeep of the property. This includes tasks such as painting, chimney cleaning, and repairs to floors, ceilings, staircases, or the roof. Major structural repairs—such as work on walls, heating systems, or electrical installations—are generally the responsibility of the bare owner, unless otherwise agreed. In certain cases, however, the usufructuary may also take on essential structural renovations or capital investments at the start of the usufruct, provided these obligations are clearly defined in both the valuation and the notarial deed.
Inventory at the start of usufruct: At the beginning of the usufruct, the usufructuary is required to prepare a detailed inventory of the property. This documentation protects the interests of both the usufructuary and the bare owner, particularly with regard to the property’s return to the bare owner once the usufruct expires.
Impact of a split purchase on your company
In business, usufruct is often established on real estate for a fixed term to avoid transfer duties and capital gains tax when the property is later removed from the company.
In this structure, the company acquires the usufruct while the business director personally purchases the bare ownership of the property. At the end of the agreed term, the usufruct expires and the director becomes the full owner of the property—typically without additional tax implications.
Example: valuation simulation of usufruct
Suppose a property is purchased through a split purchase for €1,000,000: The company acquires the usufruct (75%) for 30 years: €750,000. The director acquires the bare ownership (25%): €250,000. After 30 years, the director automatically becomes the full owner and can sell the property. If sold for €1,400,000, the director receives the full amount tax-free. In contrast, a standard purchase by the company would, upon sale, result in €275,000 in corporate tax (€1,400,000 – €300,000 land value × 25% corporate tax).
| Split Purchase: 75% usufruct & 25% bare ownership | Full Ownership by Company | |
| Acquisition Price | Company: usufruct (75%) – € 750.000 Director: bare ownership (25%) – € 250.000 |
Full ownership by company: € 1.000.000 |
| Sale Outcome | At the end of the usufruct, the director becomes full owner and sells the property for €1,400,000. No tax due. | The company sells the property for €1,400,000. Corporate tax: (€1,400,000 – €300,000 land value) = €1,100,000 × 25% = €275,000. |
Acquisition Price
Split Purchase: 75% usufruct & 25% bare ownership
Company: usufruct (75%) – €750,000
Director: bare ownership (25%) – €250,000
Full Ownership Acquisition
Company: full ownership – €1,000,000
Sale Outcome at the End of the Usufruct
Split Purchase: 75% usufruct & 25% bare ownership
The director becomes full owner and sells the property for €1,400,000, with no taxes due.
Full Ownership Acquisition
The company sells the property for €1,400,000.
Corporate tax: (€1,400,000 – €300,000 land value) = €1,100,000 × 25% = €275,000.
Benefits of a split purchase for companies
- Acquisition costs (registration duties, VAT, notarial fees, etc.) are largely borne by the company.
- Acquisition costs can be deducted as business expenses.
- The usufruct can be depreciated.
- Most property-related costs (e.g., interest, insurance, property tax) are tax-deductible.
As a result, the company’s taxable income decreases, reducing the corporate tax burden.
In these types of transactions, a correct valuation of the usufruct is crucial to avoid tax issues. If the usufruct is overvalued, the bare ownership will automatically be undervalued. Such undervaluation can be considered by the tax authorities as a taxable benefit in kind.
At CC Experts, we ensure this risk is avoided. Contact us for a professional and reliable valuation of usufruct.
How is usufruct correctly valued?
For income tax purposes, there is no single method mandated by fiscal law to value usufruct. Therefore, valuations rely on economic principles and market-based transactions between independent parties. The main factors that determine the value of usufruct are:
1. Gross Rental Value
The annual income the property can generate. The higher the rental value, the greater the value of the usufruct.
2. Operating Costs
Costs such as property tax, maintenance, insurance, and vacancy. Lower operating costs increase the value of the usufruct.
3. Capital Investments
Expenses incurred to improve or maintain the quality of the property. Higher capital investments for the usufructuary reduce the value of the usufruct.
4. Duration of the Usufruct
The length of the usufruct, which can last up to 99 years. The longer the duration, the higher the value of the usufruct.
5. Return
Expected returns and risks of the real estate investment. A lower expected return for the usufructuary increases the value of the usufruct.
Based on our experience, tax authorities typically scrutinize usufruct valuations carefully, with particular attention to the property’s rental value and a market-consistent return for both the usufructuary and the bare owner.
Detailed valuation report with rental value justification
A proper valuation of usufruct requires a comprehensive valuation report of the rental value, based on a detailed analysis of at least three representative comparables. The report must clearly explain how the market rent was derived from these comparables.
Trust CC Experts for accurate usufruct valuation
At CC Experts, we rely on our exclusive database of real estate data across Belgium. Without a robust supporting analysis, there is a risk that the tax authorities may reject the proposed values of the bare ownership and usufruct due to insufficient reliable property and rental data. If the market rent—the essential basis of the usufruct—is rejected, the entire structure may collapse, leaving the tax authorities free to challenge the arrangement.
Usufruct valuation report with market-based yield justification
Based on the estimated rental value, we prepare a detailed valuation of both the usufruct and the bare ownership. This valuation follows “the rules of the art”, taking into account the positions of the Advance Ruling Service (Ruling Committee) and the most recent case law, particularly regarding market-consistent yields for the usufructuary and the bare owner.
Without such careful methodology, the tax authorities may claim that the valuation is not market-based and treat it as a benefit in kind for the director. At CC Experts, we ensure this risk is avoided.
Learn more about your company as usufructuary or split purchase
Since each file or project is unique, we tailor our services to your specific needs and objectives. Contact one of our experts for a no-obligation consultation to discuss your options.