Most international buyers walk into a French Alps purchase expecting to pay the full market price. A smaller group do not. They buy only the nue-propriété — bare ownership — at 60 to 70% of the property's full value, hold it through a fixed usufruct period of 15 to 20 years, then receive full ownership automatically when the term expires. No further purchase, no transfer tax, no income tax event. The legal framework is called démembrement de propriété, and it is one of the most tax-efficient structures available under French property law.
This is not an avoidance scheme. It is a standard notarised transaction codified in the French Civil Code and used by institutional investors, wealth managers and a growing number of informed international buyers. What makes it particularly relevant now is the combination of high transfer costs on resale (Savoie and Haute-Savoie now charge 5% transfer tax), rising IFI exposure on multi-property portfolios, and the management burden the Loi Le Meur has placed on furnished rental operators. Démembrement sidesteps all three.
Two Rights Carved Out of One Property
French law permits full ownership — pleine propriété — to be divided into two separate components. The usufruit confers the right to use the property and collect any income from it. The nue-propriété (bare ownership) confers no right of current use or income, but carries the right to become the full owner when the usufruit eventually expires. The person who holds the usufruit is the usufruitier; the bare owner is the nu-propriétaire.
In the context of French Alps new-build investment, the relevant structure is démembrement temporaire — a fixed-term arrangement, typically 15 to 20 years, after which the two rights reunite (réunissent) automatically in the hands of the bare owner. No deed of sale is needed; the bare owner receives full ownership by operation of law, without paying any additional purchase price and without triggering any French tax charge.
Pricing: How the Discount Is Calculated
Article 669 of the Code Général des Impôts sets the fiscal valuation of a temporary usufruct at 23% of the full property value per tranche of 10 years (rounded up, without fractions). A usufruct with a term falling in the 11–20 year bracket is therefore valued at 46% of full ownership value, leaving the bare ownership at 54%. This is the fiscal floor — the minimum value the nue-propriété is attributed for registration and tax purposes.
In practice, institutional démembrement programmes in French Alps new-builds price the nue-propriété at between 60% and 70% of the equivalent full-ownership price — a structural entry discount of 30 to 40%. On a two-bedroom apartment where comparable full-ownership new-builds are priced at €380,000, the bare-ownership price in a well-structured programme typically falls between €228,000 and €266,000. Notaire fees on acquisition are calculated on the nue-propriété price alone, not the full market value — and new-build VEFA purchases attract notaire costs of only 2–3% rather than the 7–8% that applies to resale.
The Tax Position During the Démembrement Period
Income tax — nothing to declare
The usufruitier receives all rental income and is responsible for declaring and paying French income tax on it. The nu-propriétaire receives nothing and accordingly has nothing to declare under French income tax rules for the duration of the démembrement. For non-resident buyers — who would otherwise pay a minimum 20% withholding rate on net French rental income, plus 17.2% in prélèvements sociaux — this eliminates a significant annual charge. A well-placed two-bedroom apartment in a major resort generating €18,000–€22,000 per year in gross rental income creates no French income tax obligation whatsoever for the bare owner.
IFI — exempt throughout the usufruct period
Under Article 968 of the CGI, real estate subject to a usufruct is included in the IFI declaration of the usufruitier — not the bare owner. The nu-propriétaire does not include the property in their taxable real estate patrimony during the démembrement period. Given that the IFI threshold sits at €1.3 million of net real estate assets (assessed at 1 January each year), this is directly relevant to buyers who already hold French property or whose worldwide real estate portfolio approaches that threshold. The Domosno IFI guide covers the threshold, rates and deductions in full.
Taxe foncière — borne by the usufructuary
By standard notarial convention in institutional démembrement programmes, the annual taxe foncière demand is borne by the usufructuary. Given that taxe foncière rates across Savoie and Haute-Savoie communes have risen consistently in recent years — with surtaxes on second homes applied in certain ski communes — this represents a meaningful saving accumulated across a 15–20 year holding period.
How Institutional Démembrement Works in Practice
In French Alps new-build programmes, the usufructuary is typically a regulated institutional body: a professional tourism residence operator, a social housing lessor (bailleur social), or a real estate fund. The developer structures the sale so that the investor acquires the nue-propriété at completion via a standard VEFA notarised act, while the institutional usufructuary simultaneously takes on the temporary usufruit and assumes contractual responsibility for lettings, maintenance, building charges, insurance and operating costs for the agreed term.
The bare owner's legal obligations during the démembrement are narrow. Under Article 605 of the Civil Code, the nu-propriétaire is technically responsible for grosses réparations — major structural works such as load-bearing walls and roof structure. In practice, well-drafted institutional programmes assign all maintenance obligations to the usufructuary by express contractual override, leaving the bare owner with no active management responsibilities during the holding period.
At the end of the term, the property is returned to the bare owner. The acte de démembrement should specify a minimum condition standard for restitution — and place the obligation on the usufructuary to fund any remediation required to meet it before handover.
Démembrement programmes are not universally available on the market. The structure requires a developer prepared to sell the nue-propriété and an institutional counterparty willing to take on the usufruit. Buyers should ask specifically whether a given new-build programme is structured on this basis — it is not the default arrangement in the French Alps.
Capital Gains Tax: The Taper Clock Starts at Acquisition
French CGT applies when the property is eventually sold. The structural advantage that most guides overlook: the taper relief period runs from the date of the original nue-propriété purchase — not from the date when the usufruct expires and full ownership is returned.
Under French CGT rules, the 19% income tax component on real estate gains is eliminated after 22 years of ownership. A buyer who purchases bare ownership in 2026 under a 15-year usufruct and sells the reconstituted full property in 2050 will have held the asset for 24 years — regardless of the fact that they only received full ownership in 2041. The 19% IR component would be fully abated at the point of sale. The 17.2% social charges on gains are abated entirely after 30 years of ownership, which for a 2026 bare-ownership purchase means a 2056 threshold. The full CGT taper schedule for non-residents is covered in detail on Domosno.
The CGT acquisition price is the price actually paid for the nue-propriété. Since this is 30–40% below full ownership value, the notional taxable gain on eventual sale is correspondingly larger — but for investors approaching or exceeding the 22-year abatement milestone, the 19% IR element becomes largely academic.
What to Scrutinise in the Acte de Démembrement
The terms of the démembrement are set in the notarised acte. Institutional programmes are generally well-drafted, but five specific points warrant careful review before signing:
- The identity and financial standing of the usufructuary. You hold an illiquid asset for 15–20 years against the creditworthiness of this counterparty. Programmes backed by regulated funds, established tourism residence operators or social housing bodies carry materially lower counterparty risk than smaller or ad hoc operators.
- Handover condition and reinstatement obligations. Confirm the acte specifies a minimum condition standard at expiry and that the usufructuary is contractually obliged to fund any remediation required to reach it.
- Early exit and insolvency provisions. What happens if the usufructuary becomes insolvent or exits the programme before the term expires? The acte should define the bare owner's protections in this scenario.
- Transfer restrictions during the démembrement. Can you sell the nue-propriété to a third party if your circumstances change? Most programmes permit secondary transfer, but check whether the usufructuary holds a right of first refusal that affects liquidity.
- Mortgage financing. Not all French lenders will advance against a nue-propriété as security — the asset is illiquid during the démembrement. Specialist lenders and the private banking arms of major French banks will consider it, but on stricter terms and lower lending-to-value ratios than for a full-ownership purchase. Confirm your financing route before signing any preliminary agreement.
Who This Structure Suits
Démembrement de propriété is a poor fit for buyers who want personal use of a French Alps apartment — you cannot stay in the property during the usufruct period. It is equally unsuitable for buyers who need rental income to service a mortgage, as French lenders will not count income accruing to the usufruitier in any affordability assessment for the bare owner.
The structure suits a specific investor profile: high-income non-residents for whom the elimination of French rental income tax and social charges is worth more than the income itself; buyers with existing IFI exposure who want to add a significant French Alps asset without a corresponding balance sheet liability; and long-horizon investors with a 15–25 year view who want exposure to French Alps capital growth without the management overhead of an operating rental business and without the registration obligations the Loi Le Meur now imposes on furnished letting operators.
For buyers evaluating the full range of ownership structures for French ski property — including LMNP, SCI, indivision and para-hôtelier — the Domosno investment structures guide sets out the trade-offs in detail. The Domosno team can advise on which current French Alps new-build programmes are available on a démembrement basis and what the institutional usufructuaries look like in 2026.
