Usufruct: Definition and How It Works

What usufruct and bare ownership mean

Article 832 of the Italian Civil Code defines full ownership as the right to “use and dispose of things in a full and exclusive way.” Usufruct and bare ownership are what’s left once that single right is split in two: the right to use the asset moves to one person, the usufructuary, while the other, the bare owner, keeps title and the power to dispose of it — sell it, mortgage it — but not to use it.

Article 981 states the mirror image: the usufructuary “has the right to enjoy the thing, but must respect its economic purpose” — they can live in a house, rent it out, collect its produce, but they cannot sell it or repurpose it however they like.

How it’s created

Under Article 978, usufruct, and with it the bare ownership that complements it, arises by law, by the will of the parties, or by adverse possession. It’s the second case that concerns most families: a sale contract or a deed of gift in which the owner transfers the asset while reserving the usufruct, a private application of the same legal norm that leaves room for individual choice. The case where it arises directly by law, with no deed at all, is the surviving spouse’s right of habitation, reserved by Article 540 of the Italian Civil Code to whoever outlives their spouse on the family home, leaving the heirs as bare owners.

The most common case, according to the practical guide published by Notaio Facile, is parents who sign the house over to their children while continuing to live in it: they give away the bare ownership and keep the usufruct for themselves, the right to live there for the rest of their lives.

Example: A couple signs the bare ownership of the family home over to their children, keeping the usufruct for themselves. The children become owners right away, but they can’t move into the house or rent it out while either parent is alive — that right stays with the usufructuaries.

Who can do what: a comparison table

Right	Full ownership	Bare ownership	Usufruct
Use the asset	Yes	No	Yes
Collect its proceeds (rent, produce)	Yes	No	Yes
Sell or give away one’s own share	Yes	Yes, the bare ownership	Yes, one’s own right, not the asset
Mortgage it	Yes	Yes	No
Change the asset’s economic purpose	Yes, within legal limits	No	No

How usufruct ends (and what happens to bare ownership)

The most common cause is the usufructuary’s death: Article 979 states that “the duration of usufruct cannot exceed the life of the usufructuary” (thirty years for a legal entity, a different case from a family situation). When usufruct ends, the bare owner doesn’t need to request or sign any new transfer: according to Notaio Facile, “once the usufruct’s term expires, the bare ownership automatically expands into full ownership,” typically through a simple land-registry update, with no deed required.

Article 1014 lists three further causes of extinction. They’re rarer, but written into the law: prescription after twenty years of non-use, merger, when usufruct and bare ownership end up in the same person’s hands — through inheritance, for instance — and the total loss of the asset the usufruct was created on.

A dispute between a bare owner and a usufructuary, like any other civil matter, is settled by the Italian court system under its ordinary rules of jurisdiction.

Usufruct and the common-law life estate

Common-law countries don’t have bare ownership and usufruct as such, but they have a close cousin: the life estate. Cornell Law School’s Legal Information Institute defines it as “an interest in property that lasts only for the life of a specific person, usually the possessor of the estate.” A life estate is typically created by a deed that spells out what happens next — the Institute’s own example is a grant “to John Doe for life, then to Jane Doe,” which gives John a life estate and Jane a remainder, the right to take full ownership once John’s interest ends.

The resemblance to usufruct is real: someone gets to use the property for a lifetime, someone else is waiting to receive it in full. But the two aren’t the same institute wearing different names. A life estate is a common-law creature, shaped by case law and, in the United States, different from state to state; usufruct is a civil-law right defined by a code, with its own rules on registration, taxation, and what counts as an economic purpose. Anyone comparing the two across borders should check the local rules directly, since the terms don’t map onto each other one to one.

Can bare ownership be sold?

Yes. It’s as common as gifting it to children: whoever holds a bare ownership can sell it even while the usufruct is still running, because the power to dispose of the asset, guaranteed by Article 832, stays theirs. The buyer becomes the new bare owner in the seller’s place, but doesn’t gain the right to live in or rent out the property — that stays with the usufructuary, for as long as their right lasts. The property rights article covers the same power of disposal in its undivided form, held by a single owner.

Tax treatment

According to the Italian Revenue Agency, the “price-value” regime — which taxes the cadastral income instead of the price stated in the deed — applies to purchases of full ownership and to purchases of bare ownership and usufruct as well. The taxable value of the two rights is calculated separately, with a coefficient that depends on the usufructuary’s age: the younger the usufructuary, the longer their right of use is expected, in theory, to last, and the lower the value of the corresponding bare ownership.

Anyone looking for the current coefficients can find them on specialized legal portals such as Federnotizie, which calculates them from the minimum rate set specifically for this calculation — not Italy’s general statutory interest rate, which follows its own separate path. Article 46, paragraph 5-ter, of Presidential Decree 131/1986, as amended by Legislative Decree 139/2024, sets a rate of no less than 2.5% for valuing usufruct and bare ownership for tax purposes, applied by an Italian Ministry of Economy and Finance decree dated December 24, 2025. The Revenue Agency itself doesn’t publish that table, though: it works as a practical reference, and it isn’t first-hand official data.