For the seller
They receive a sum immediately, keep the right to live in the property, and are no longer responsible for extraordinary maintenance.
Property · Rights in rem
Usufruct and bare ownership
A property can have two holders: the person who uses it and the person who owns it. The split is clear-cut when it comes to rights, less intuitive when it comes to taxes, where not everything follows the person who has the use of it.
01 · The two rights
What belongs to each holder
The usufructuary (usufruttuario) has the right to use the property and to take its fruits (living in it or letting it out), with the duty to respect its economic purpose. The bare owner (nudo proprietario) keeps the ownership, which becomes full again when the usufruct ends.
- A usufruct is temporary: if it is for life, it lasts at most as long as the usufructuary lives.
- When the usufructuary dies, the ownership reunites automatically with the bare owner, with no inheritance tax on that step.
- A usufruct in favour of a legal entity has a maximum duration set by law.
- Both can transfer their own right, but neither can dispose of the whole.
- The right of habitation (diritto di abitazione) is something different: more limited, and it cannot be transferred or let.
| Usufructuary | Bare owner | |
|---|---|---|
| Living in the property | Yes | No |
| Letting it and collecting the rent | Yes | No |
| Selling the whole property | No, only their own right | No, only the bare ownership |
| Ordinary maintenance | Their responsibility | No |
| Extraordinary maintenance | No | Their responsibility |
| Mortgaging it | Only their own right | Only the bare ownership |
The reuniting of ownership on the death of the usufructuary is what makes the arrangement attractive: the bare owner becomes full owner without paying inheritance tax on that step, because there is no transfer at all: their right simply expands.
02 · The calculation
How the value of usufruct and bare ownership is calculated
The value of the usufruct is found by applying to the value of full ownership a coefficient set by law, which depends on the age of the usufructuary. The bare ownership is worth the difference.
The value of full ownership
This is determined under the rules that apply to the transaction: cadastral value, price, market value.
The coefficient
It depends on the age of the usufructuary on the date of the deed, and the younger the usufructuary, the higher it is.
The value of the usufruct
You get it by applying the coefficient to the value of full ownership.
The value of the bare ownership
It is the difference between the value of full ownership and the value of the usufruct.
Why age matters so much
The coefficient follows a precise logic.
- A usufruct held by a seventy-year-old will presumably last less time
- So it is worth less, and the bare ownership is worth more
- A usufruct held by a fifty-year-old is worth much more
- The younger the usufructuary, the less a buyer pays for the bare ownership
03 · Who pays what
IMU, TARI and income tax
This is the least intuitive part, because not every tax follows the same rule.
- IMU (the municipal property tax) is due from the usufructuary, not the bare owner: the usufructuary is the taxpayer.
- TARI (the municipal waste tax) is paid by whoever occupies the property.
- The income from the property (reddito fondiario) is declared by the usufructuary, who holds the right of use.
- If the property is let, the rent is the usufructuary's income, and they can opt for the cedolare secca (the flat tax on rental income).
- For the ISEE (the indicator of household economic situation used for benefits), property is valued under the rules of the DSU (the self-declaration behind the ISEE), which look at who holds which rights.
- The bare owner does not declare any income from the property.
The bare owner pays no IMU and declares no income, but the property remains part of their assets for some assessments, and bare ownership counts for the first-home tax benefits on a future purchase. It is a detail that often comes up years later.
04 · The transaction
Selling the bare ownership
This is the most common transaction: an older person sells the bare ownership of the home they live in, receives money straight away and goes on living there for life.
For the buyer
They buy below the market price, expecting to obtain full ownership when the usufruct ends.
The price
It is determined by applying the statutory coefficients, but the market can depart from them: it is a negotiation.
The taxes
They apply to the value of the bare ownership, not the whole property: proportionally, they are lower.
The capital gain
For the seller, the ordinary rules on capital gains on property apply, referred to the share sold.
The risks
For the buyer, uncertainty about how long it will last; for the seller, losing full control of the property.
05 · Within the family
Usufruct, bare ownership and inheritance
This is where usufruct appears most often, either by law or by choice.
- By law, the surviving spouse has the right to live in the family home and to use the furniture in it.
- Many wills leave the usufruct to the spouse and the bare ownership to the children: a solution that protects both.
- In the declaration of succession (the Italian inheritance tax return) the two rights are valued separately, using the statutory coefficients.
- The reuniting of ownership on the death of the usufructuary is not a transfer and does not give rise to inheritance tax.
- Donating the bare ownership while keeping the usufruct is a common way of passing property on early. See donating a property.
- A joint usufruct between spouses, which passes in full to the survivor, must be expressly provided for in the deed.
Donating the bare ownership while keeping the usufruct reduces the taxable base of the donation and lets the parent go on living in the house. It does, however, leave the issue of a property that comes from a donation, which makes it hard for the child to sell: the topic is covered on the page about donations.
06 · Living together
Mutual obligations
Two rights over the same property need rules, and the law sets out quite a few.
- The usufructuary must use the property with the care of a prudent owner (the "buon padre di famiglia" standard) and respect its purpose.
- They must bear the ordinary costs: maintenance, upkeep, management, and the taxes charged on the income.
- The bare owner bears extraordinary repairs, but the usufructuary owes them interest on the sums spent.
- The usufructuary must draw up an inventory and provide security, unless released from doing so.
- Abuse of the right can lead to the usufruct being terminated.
- Improvements have their own rules: it is worth dealing with them in the deed, to avoid disputes when ownership reunites.
The split between ordinary and extraordinary costs is the main source of conflict. A well-drafted deed deals expressly with the most delicate items (redoing the roof, replacing the boiler, extraordinary works on the building) instead of relying only on the general rule.
Frequently asked
The questions that keep coming up
Who pays IMU, the usufructuary or the bare owner?
The usufructuary. They are the IMU taxpayer, because they hold the right in rem to use the property: the bare owner pays nothing.
If the usufructuary is resident and usually lives there, the property is their main home, with the treatment that follows. The same rule applies to declaring the income from the property.
How much is a usufruct worth?
It is calculated by applying to the value of full ownership a coefficient set by law, which depends on the age of the usufructuary on the date of the deed.
The younger the usufructuary, the higher the coefficient and the more the usufruct is worth; conversely, the bare ownership is worth less. The value of the bare ownership is always the difference from full ownership.
Can I sell the bare ownership of my home and go on living in it?
Yes, it is the typical transaction: you sell the bare ownership, keeping a life usufruct, receive a sum straight away and go on living in the property.
You need to look carefully at the price, which depends on the statutory coefficients but is still open to negotiation, and at how extraordinary costs are split, since they pass to the new bare owner.
Do I have to pay anything when the usufructuary dies?
No. The reuniting of ownership with the bare owner is not a transfer: their right simply expands, and there is no inheritance tax on that step.
The practical formalities remain: the IMU update, the TARI declaration if the occupant changes, and including the property in your own income tax return.
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The value of a usufruct depends on the age of the person who holds it
It is a calculation with coefficients set by law, and it determines the taxes, the prices and whether the transaction is worthwhile.