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Welcome to our FAQs on buying a fractional ownership property! Fractional ownership, also called co-ownership for second homes, is a type of property investment that allows multiple people to co-own a holiday property without all the costs associated with it. This is a great option for those who want to holiday in a particular location, but don’t want the burden of maintaining a full-time residence there.

In this FAQ, we will cover everything you need to know about buying a fractional ownership property, including how it works, the benefits and drawbacks, and what to consider before making a purchase.

So if you’re considering buying a fractional ownership property, read on for all the information you need to make an informed decision.

Co-ownership, also known as fractional ownership, is a popular option for those looking to purchase a second home without bearing the full cost and responsibility on their own. It allows individuals to buy a share of a second home with other co-owners, through a company (usually an SCI in France/ an SL in Spain) that holds 100% of the property deed. This can also be an excellent solution for friends or relatives looking to purchase a second home together (this system has been used for decades in France so it is nothing new under the sun), as well as for those who want to invest in a holiday property but don’t have the means to do so on their own.

Here are the key points to consider when looking into co-ownership for your second home:

  • You can buy between one and four parts of a property through a company that holds the property deed.
  • Each part typically allows you to stay in your second home for a certain number of days per year, such as 44 days (or 1.5 months) for a 1/8th share. You can buy additional shares to increase your stay time.
  • A professional management company is responsible for looking after the property on behalf of the co-owners, including maintenance, cleaning, and rentals when the property is not in use.
  • Co-ownership allows you to purchase a premium property at a fraction of the cost, as the price of the share includes the cost of renovation and furniture upgrades.
  • You will split the maintenance, running costs, and taxes equally among the co-owners and pay only your share.
  • Overall, co-ownership can be a cost-effective and convenient option for those looking to purchase a second home without the full financial burden. It allows you to enjoy all the benefits of owning a holiday property without having to worry about day-to-day management and maintenance.

A virtual or/and physical visit to each of the properties on sale can be organised of course.

One could say that co-ownership and time-sharing allow as many people as possible to access the dream of a premium second home. The comparison ends there.

Timesharing is just what it is, that is that in the end, you only just own time and no real estate!

The solution and service offered by co-ownership allow you, unlike time-sharing:

To actually own (via a company) a property asset and not just the right to use is (or time…).
They say it is all about location, location so you can choose carefully any property on the real estate markets.
To keep control of the service charges and protect you from a possible bad-paying co-owner thanks to an innovative French law contract.
To benefit in a flexible way (and not a fixed week) from the enjoyment of your property (from as little as 2 or 3 nights in general)
 To benefit from a turnkey concierge, maintenance and upkeep service, in order to generate additional income without doing anything when you are not enjoying your second home.

Yes. Owners can use a company or their legal name to purchase a share of the property. 

On the fractional ownership company side, all is done efficiently tax-wise and you do not have to worry about anything.

It is only in the country where your company that purchased a part is based that you should consult with your accountant on what to declare. This goes, not only for a fractional property but also for any second home abroad.

No. You do not need to pay for stamp duty separately. Stamp duty was paid when the property was purchased and the company holding the property was set up. You only pay for the share(s) that you need.

Everything is included in that price: the property purchased, the stamp duty, renovation work if any, the furniture upgrade, the interior design, the company set-up/duties to be paid and the arrangement fees.

The purchase cycle of a property fractional share on the market usually takes two weeks to three months. The buying process of a house depends on how many buyers there are and how many fractions each owner gets.

The actual buying of the share is speedy and just a matter of days. When a mortgage is required it takes a few months.

The exact type of company that holds the property depends on the country; for example, in France it is an SCI (also SCIA, SCI d’attribution). In Spain, often an SL (Sociedad Limitada), and in the UK a Limited company.

These limited companies are a unified front that represents and protects a group of buyers. Each limited company has its own bank account, and tax ID number and holds 100% of the deed of the home. No one else holds shares in that company apartment from the co-owners.

Family relatives and friends have used these companies to hold properties for decades so it is nothing new under the sun.

The length of the buying process for a property can vary, but it typically takes around 2-3 weeks. This can be influenced by factors such as the number of buyers interested in the property and the number of fractional shares that each owner holds.

The actual purchase of the property can be relatively quick, typically just a matter of days.

Yes, you can finance the purchase of a fractional property share with a mortgage in Spain (we are working on France).

Some partners in Spain may be able to help you obtain a mortgage to finance your share (usually an interest-only loan. If you are interested in this option, you can contact us for more information.

When purchasing a fractional property, you have the option to buy a certain percentage of the home, up to a maximum of 50%, which is equivalent to four shares (when the property is divided into eight equal parts). Shares are often sold in units of ⅛ ownership, although this can vary. Each share allows you to use the property exclusively for 44 days per year. You can typically buy between one and four shares of the same property, depending on your budget and the number of days you want to stay there annually.

For example, one share would allow you to stay for 44 days, two shares for 88 days, three shares for 132 days, and four shares for 176 days. It is generally possible to buy up to four shares of a single property to avoid having a majority shareholder who could influence all the decisions of the company. However, you can buy as many shares as you like spreading with other properties.

Yes, of course it is possible to purchase a fractional property with loved ones, family members, or friends. Originally this is why fractional ownership was created. This is a common way that co-ownership arrangements are formed, with multiple individuals coming together to buy a property through a company.

The advantage of our system is that it is professionally managed, which can help to avoid potential issues that can arise when managing a property with close relationships. This can be a good option for those who want to purchase a second home with others but want to avoid the difficulties that can come with managing the property on their own.

Yes, you are welcome to bring in your own group of people to share a fractional property with. This can be a good option for individuals who want to share a property with friends or colleagues who have similar interests and values. An example would be skiing, a group of friends who enjoy skiing in the French Alps. 

If you already have a group of people in mind who you would like to share a property with, you can arrange for all of you to purchase shares together.

One of the benefits of this arrangement is that the professional management team can help to remove any emotional ties that may exist between the co-owners, making it easier to manage the property if relationships break down in the future.

As a foreigner or non-resident, it is possible for you to purchase a share of a second home through an SCI, or a “société civile immobilière,” which is the type of French legal entity that holds real estate property.

When buying a property, say in France, you may be subject to certain tax obligations, such as the wealth tax (IFI) in France if the net value of your real estate assets in the country exceeds 1.3 million euros. Fractional ownership obviously mitigates this and you pay no wealth tax unless you own parts above 1.3M€. So, you could own a 5M€ villa and still pay no tax.

When buying real estate in France or Spain there is no limit based on nationality. 

Yes, when you purchase a share of a property, you can enjoy the entire property during the stays you have reserved. The other co-owners will also have their own reserved stays, during which they can enjoy the property as well. Essentially, this means that you will never be staying in the property at the same time as the other co-owners.

While you are staying in the property, you are free to invite friends or family members to join you or to allow them to stay on their own. In this way, you can fully enjoy the property as if it were your own, even though you only own a fraction of it.

Oh, and you can even post on Insta from your newly-acquired 5-bed villa in Ibiza if you wish! Nobody will know you own only a part…

The time it takes to start enjoying your share of the property will depend on how you fund the purchase. If you can provide the necessary funds quickly, you may be able to start enjoying the property as soon as your share is created, which typically takes 2-3 weeks.

However, if renovation work is planned for the property, the purchase of shares may be delayed until the renovations are completed. In this case, it could take longer for you to use the property.

Yes, there is often a cooling-off period when purchasing a fractional property share, similar to when buying a traditional property. This is a period of time during which you can change your mind and cancel the purchase without incurring any penalties. The length of the cooling-off period can vary depending on the country in which you are purchasing the property.

In France, for example, the cooling-off period is 14 days. This means that you have 14 days after signing the reservation contract to decide if you want to go through with the purchase. If you change your mind within this period, you can cancel the contract without any consequences.

Yes, a co-ownership property is typically fully furnished and equipped with everything you need for daily use. This includes items such as crockery, bed linens, towels, and bathroom products. The house will be ready for you to use and enjoy as any other second home.

The property will also be decorated by interior designers to create a cohesive and attractive appearance. This means that you do not need to worry about purchasing or bringing any additional furnishings or household items to move in your new property.

When you purchase a share of a second home through fractional ownership, you also become the owner of the furniture and equipment that are included in the property. This means that you will indirectly hold a portion of the value of the furniture and equipment based on the number of shares you own.

For example, if you own one share, which is typically equal to ⅛ of the property, you will indirectly own ⅛ of the value of the furniture and equipment. If you own more shares, you will own a proportionally larger share of the value of the furniture and equipment. Essentially, you have an ownership stake in both the land, the house, and the furnishings and equipment that are included with the property.

If you are interested in purchasing a fractional property and want to find other buyers to share the property with, we can help. We have a network of real estate professionals and potential clients that we can work with to find the right group of individuals to share the property with you. Our goal is to ensure that you are able to find compatible co-owners who will be a good fit for both you and your home.

If you see a property that you love and want to purchase a share with two members of your family, you can do so. Once you have pre-reserved the parts that you and your family members want to buy, we can work to find potential owners for the remaining parts.

However, you do not need to wait for the remaining parts to be sold before you can start enjoying the property. You can begin using the property as soon as your share is created, even if the other parts have not yet been purchased. This allows you to start enjoying the benefits of ownership right away, without having to wait for the entire property to be fully sold.

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