Bare ownership separates legal ownership from the right to use and benefit from a property. The owner may sell the bare title while retaining usufruct, creating an arrangement that can suit a seller needing liquidity and a buyer taking a long-term view.
What is bare ownership?
The bare ownership is ownership of a property subject to another person's usufruct . The usufruct holder may live in the property, let it or receive its income, while the buyer becomes the bare owner , holding title without immediate enjoyment. Full ownership is consolidated when the usufruct ends, for example on the holder's death or expiry of its agreed term.
How bare ownership works
Bare ownership: The buyer owns the interest but cannot occupy or directly benefit from the property while the usufruct continues.
Usufruct: The holder retains the right to use the property and receive its income, such as rent, for the lifetime or fixed period provided by the arrangement.
The Italian Civil Code, in Article 832, describes ownership as the right to enjoy and dispose of things fully and exclusively. Usufruct limits the owner's immediate enjoyment, leaving the underlying ownership interest.
Valuing the interest
The value of bare ownership is assessed by deducting the usufruct's value from the property's full market value. A professional considers the property, the usufruct's terms and the holder's age. All else equal, a shorter expected usufruct tends to mean a higher bare-ownership value; tax valuation coefficients and negotiated market prices are distinct.
How do you buy bare ownership?
Estate agency support: An agent can assist with the search, negotiation and coordination of the transaction.
The notary's role: A notary normally formalises and registers the conveyance. An informal letter of intent does not provide the protections of a properly structured transfer.
When full ownership is consolidated
The article lists circumstances that can bring the usufruct to an end:
Death of the usufruct holder
Expiry of the agreed term
Non-exercise of the usufruct for 20 years
Abuse or deterioration attributable to the holder, subject to the applicable legal remedies
The ending of usufruct consolidates the interests in full ownership; the legal requirements and any court procedure must be checked for the particular ground relied on.
Advantages and drawbacks
For the seller retaining usufruct
Immediate liquidity: The seller receives a capital sum while retaining the agreed right to use the home.
Housing continuity: The seller can remain for life or for the agreed period, as the deed provides.
For the buyer of bare ownership
Lower initial price: Bare ownership usually costs less than full ownership because the usufruct limits immediate enjoyment.
Long-term horizon: The value may change as market conditions and the remaining usufruct period change. Appreciation is not guaranteed.
Allocation of expenses: Ordinary maintenance and taxes linked to enjoyment generally fall to the usufruct holder, subject to the applicable rules.
Tax matters and first-home relief
Bare-ownership purchases may qualify for first-home purchase relief where the relevant conditions are met. The original article summarises these as:
No disqualifying ownership rights over another home in the same municipality.
No other disqualifying home already bought with first-home relief, subject to permitted disposal arrangements.
The property must fall within an eligible cadastral category.
Where required, residence must be established in the municipality within 18 months. If the buyer already lives in the same municipality, that requirement is normally already satisfied. Residence need not necessarily be at the address of the property bought, provided the relevant municipal residence condition is met or another applicable statutory condition, such as qualifying work in that municipality, applies.
Rights and duties of each party
The bare owner's rights
Although unable to enjoy the property immediately, the bare owner retains rights including:
Transfer to another person: Bare ownership can be sold or transferred without removing the existing usufruct.
Maintenance issues: The owner can seek performance of the holder's maintenance duties and, where necessary, use appropriate legal remedies. Responsibility for extraordinary works follows separate rules.
The usufruct holder's responsibilities
The usufruct holder must:
Preserve the property's condition: Use it with due care and respect its purpose and the applicable restrictions on alterations.
Pay the relevant expenses and taxes: Ordinary maintenance and charges linked to enjoyment are allocated under the Civil Code, including article 1008, and the applicable tax rules.
Respect the agreed terms: Letting the property or transferring the usufruct must comply with the law and the deed's provisions.
Bare ownership can provide liquidity for a seller and a long-term property interest for a buyer, but it involves uncertainty over possession timing, value and costs. Contractual terms and tax consequences should be assessed with qualified professionals.
It can be a useful housing and financial planning tool when its legal structure and practical implications fit both parties' needs.
