Usufruct (Usufruto)

Usufruct (usufruto) is a real right over another person’s property through which the usufructuary (usufrutuário) gains the right to use the property and collect its fruits and income, while the bare owner (nu-proprietário) retains formal title to the property. It is a legal split of ownership: on one side, the right to use and enjoy the property; on the other, bare ownership, temporarily stripped of those rights.

• Creation: usufruct can be established by contract, will, adverse possession (usucapião), or law. For real estate, registration with the Real Estate Registry Office (Cartório de Registro de Imóveis) is required for it to have effect against third parties.
• Term: when granted for life, it ends with the usufructuary’s death; when set for a fixed term, it ends at the agreed date. The usufructuary is barred from selling the usufruct itself, though they may transfer its exercise to someone else.
• Usufructuary’s obligations: preserve the substance of the property, carry out routine repairs, pay taxes and charges levied on the fruits (e.g., current property tax), and return the property when the usufruct ends.
• Bare owner’s obligations: responsible for extraordinary works and repairs and for charges levied on the underlying capital.
• Termination: death of the usufructuary (for life grants), expiration of the term or condition, consolidation (both rights merging in the same person), waiver, loss of the property, or failure to exercise the right within the legal period.
• Taxation on creation: transferring bare ownership through a paid transaction may be subject to the real estate transfer tax (ITBI). In Florianópolis, the rate is 2% (STJ binding precedent, Tema 1.113). When created through a gift or inheritance, the state inheritance and gift tax (ITCMD) applies (Santa Catarina: progressive rate from 1% to 7%).
• Property under usufruct on the resale market: the buyer of the bare ownership receives the property subject to the usufruct until it ends, which affects value, financeability, and liquidity.

In Florianópolis, lifetime usufruct is common in estate planning arrangements, where parents transfer bare ownership to their children while keeping the usufruct so they can continue living in or earning income from the property.