Securitisation of a real estate

The Law on securitisation allows a business firm or natural person (or a family) to securitize a building.

A natural person or an entity holds a building in full ownership (or usufruct).

This person can transfer ownership of this building, or a right related to this building to a securitisation vehicle and/or reserve the right to live there until death or to use it for a certain period.

The securitisation vehicle will be assigned the ownership of the building (or a similar right) while it will issue bearer securities representing the property and potential income that arise there from. These securities will first be handed to the owner of the building; then they may be transferable to any other person by simple transmission.

Holders of the bearer securities will be able to give, return, assign, transfer or sell them to other persons. These will be paid profits related to rent management and upon settlement, the possible profit related to appreciation achieved on this building.

This method allows the division of risks or investments between investors who will have been able to acquire only a part of the building while it was sold in full by the owner (joint possession).

This transaction allows a group of individual investors to acquire, via a securitisation vehicle, a significant building without having to carry all of the investment alone.

This also allows the ownership of a building to take the form of a bearer security although, by definition, it is registered.

A family can also take advantage of this law by securitizing (transferring) its registered real estate assets with a securitisation vehicle and sharing them between its successors. Manual gift of these bearer securities is not taxable but sufficient to transfer ownership thereof.