Recent tax legislation has clarified an important point for those who sell a property by splitting the rights between bare ownership and usufruct in favour of two separate purchasers:

in this case, the sale is not automatically taxed as “miscellaneous income” for the vendor.

Tax is payable only if a capital gain (i.e. a profit) is realised, and only when certain time-based conditions are met.

With the authentic interpretation introduced by the Fiscal Decree (Legislative Decree 84/2025), retroactively in force from 2024, the legislature clarified how to distinguish the circumstances in which the transfer of a real right (such as usufruct) gives rise to:

  • Miscellaneous income → taxed immediately, regardless of how long the property has been held;

  • Capital gains → taxable only if the property is transferred within 5 years of acquisition (with certain exceptions).

The Key Rule

  • If the vendor retains any right over the property, the gain falls within miscellaneous income (subject to ordinary IRPEF or IRES).

  • If instead the vendor relinquishes every right over the property, the gain is treated as a capital gain (taxable, where applicable, at a substitute rate of 26% or at the ordinary IRPEF rates).

Practical Examples

  • Case 1: I sell only the usufruct but retain bare ownership → Miscellaneous income, immediate taxation.

  • Case 2: I sell both bare ownership and usufruct to two different persons, relinquishing every right → the capital gains rules apply.

Sale of an Entire Property by a Private Individual (Non-Entrepreneur)

If you sell a property in its entirety (i.e. you transfer every right) and:

  • you have held it for more than 5 years → no taxation (Art. 67, paragraph 1, letter b) TUIR);

  • you inherited it → no taxation, even if sold before the 5-year threshold;

  • it has been your main residence (for yourself or family members) for the greater part of the period between acquisition and sale → no taxation, even if before the 5-year threshold.

You would, however, be liable for tax (capital gains) if:

  • you sell within 5 years of acquisition,

  • and you do not fall within any of the exceptions above.

In such a case, the capital gain is taxed at the ordinary IRPEF rates or, if elected at the time of the deed, at a substitute rate of 26%.

In Summary

If you transfer the entire interest in a property, even by splitting it between multiple purchasers, the tax treatment follows the capital gains rules.

  • If you retain a portion of the interest, the gain is treated as ordinary income and taxed immediately.

  • In cases of sale within 5 years, absent any exception, the capital gain is taxable.

  • For complex transactions, a preliminary review with an adviser can help avoid unexpected tax liabilities.