Bare ownership (nuda proprietà) refers to the ownership right over an asset where the possibility of use is held by another person due to an existing usufruct (usufrutto).
The bare owner is therefore the legal owner of a property, but during the duration of the usufruct cannot fully use it. Once the usufruct expires, ownership and the right of use are reunited and the bare owner becomes the unrestricted owner (full ownership – piena proprietà).
In Italy, bare ownership is used in particular for real estate transfers within the family, donations, asset succession planning and real estate sales.
With bare ownership, ownership and the possibility of using a property are separated from each other.
The bare owner (nudo proprietario) remains the owner of the property, while the usufructuary (usufruttuario) has the right to use the property and derive economic benefits from it.
The bare owner may, in principle, dispose of their ownership right, for example by selling the property. However, the existing usufruct remains in place and must be taken into account by the purchaser.
A frequent application of bare ownership concerns advance transfers of assets.
Example:
A parent transfers a property to their child during their lifetime and at the same time reserves the usufruct.
The consequence:
In this way, assets can be transferred at an early stage while the possibility of use remains secured.
The bare owner holds the ownership right, but while the usufruct exists has only limited possibilities of use.
The main rights include:
Extraordinary maintenance measures affecting the substance of the property generally fall within the responsibility of the bare owner. The ongoing costs related to use are generally borne by the usufructuary.
Bare ownership generally exists permanently. The restriction on use ends only when the usufruct expires, for example upon the death of the usufructuary in the case of a lifetime usufruct.
Since it is a right in rem relating to real estate, bare ownership is transferred by notarial deed and registered in the land register.
Bare ownership is particularly relevant from a tax perspective in connection with donations and transfers of real estate.
In the case of a transfer with an existing or reserved usufruct, bare ownership and usufruct are assessed separately. The valuation is carried out according to the legal provisions and takes into account in particular the age of the usufructuary.
The specific structure chosen may have effects on various tax areas and should therefore always be examined based on the individual situation.
Bare ownership (nuda proprietà) allows the transfer of real estate while the right of use remains with another person.
It is used in particular for intra-family asset transfers and succession planning in order to transfer ownership at an early stage while at the same time securing existing rights of use.