Why Not to Gift Your Main Residence Too Early

Why a retired parent chose not to gift the bare ownership (nue-propriété) of her home 

The situation. Julie*, a recently retired woman in her sixties, owns a 130 m² terraced house valued at €280,000. Divorced for 28 years, she lives alone and has no significant savings. Her main goal was to transfer the bare ownership (nue-propriété) of her home to her two children to reduce future inheritance taxes. 

The issue. Julie’s initial plan was to give her children the bare ownership while retaining usufruct (usufruit). However, the notary raised a cautionary flag: divesting oneself of a main residence while it represents the bulk of one’s wealth can be risky between ages 60 and 80. 

Law constraints. Once the bare ownership is transferred, the parent cannot sell the property without the children’s consent. If they refuse, the parent is effectively stuck. Even if they agree, Article 621 of the Civil Code stipulates that sale proceeds must be split between usufruct and bare ownership according to their respective value. Article 205 ensures children must support parents in need, but relying on this is neither practical nor guaranteed. 

Alternative strategies. Notaries often suggest transferring secondary assets instead – such as a holiday home or liquid assets – unless the parent is financially secure. Another option is a société civile immobilière (SCI). Julie could contribute her property to an SCI and gift the bare ownership of the shares to her children. The structure allows her to retain significant flexibility via the articles of association, including full control over sales or special usufruct income rights. 

Takeaway. For parents whose main residence is their primary asset, early gifting may introduce legal and financial constraints that outweigh potential tax savings. Tools like an SCI or targeting secondary assets can achieve inheritance planning goals while preserving financial security and control. 

*Names have been changed for privacy.