Usufruct (usufrutto) is a special right in rem of use and enjoyment that enables a person to use a property belonging to another person and to derive economic benefits from it, although they are not the owner of that property.
In Italy, usufruct is used in particular for real estate transfers within the family, donations and in the context of asset succession planning. It allows, for example, a property to be transferred during the owner’s lifetime while at the same time ensuring that the owner can continue to use it.
Usufruct is regulated by Articles 978 et seq. of the Italian Civil Code.
By establishing a usufruct, ownership and the right to use a property are separated from each other.
The usufructuary receives the right:
However, the usufructuary does not become the owner of the property. Ownership remains with the so-called bare owner (nudo proprietario). Once the usufruct expires, the bare owner regains the full possibility of use of the property.
Usufruct is frequently used in intra-family real estate transfers.
Example:
A parent transfers a property to their child and at the same time reserves the usufruct.
The consequence:
In this way, assets can already be transferred during the owner’s lifetime without the previous owner losing the possibility of using them.
The usufructuary has extensive rights of use but must properly maintain and manage the property.
The main obligations include:
The usufructuary may not substantially alter or impair the substance of the property. Extraordinary maintenance measures affecting the substance of the property generally fall within the responsibility of the owner.
Usufruct can be agreed for a specific period or for life. In the case of natural persons, a lifetime usufruct ends at the latest upon the death of the usufructuary and cannot be inherited.
Since it is a right in rem relating to real estate, usufruct must be established by means of a notarial deed and registered in the land register.
Usufruct is particularly relevant for tax purposes in connection with donations and transfers of real estate.
The value of the usufruct right is assessed separately from the remaining ownership right according to the legal provisions. In particular, the age of the usufructuary and the valuation parameters provided by law play an important role.
Depending on the structure chosen, effects may arise in various tax areas, which is why the specific implementation should always be examined based on the individual situation.
Usufruct (usufrutto) is an important instrument in Italian real estate and asset law. It allows the separation of ownership and use and is frequently used to transfer real estate during a person’s lifetime while at the same time ensuring continued use of the property.