The 2024 Budget Law draft proposes a tax amendment for the constitution of real property rights on immovable properties from natural persons not subject to VAT. Currently, the Italian Tax Code equates onerous transfers to the constitution or transfer of real property rights, including usufruct right and surface right. The constitution or transfer of these rights results in taxable capital gains based on specific criteria. A recent ruling by the Italian Tax Authority clarified the tax treatment of a complex real estate contract, determining that the constitution of a usufruct right generates taxable income, regardless of ownership duration, while the constitution of a surface right does not generate capital gains if the land has been owned for more than 5 years. This ruling was challenged by a Notary, but several Supreme Court decisions supported the Tax Authority’s position.
Source PwC
