The sale with reservation of ownership, regulated by article 1523 of the Civil Code, is a particular contract in which the ownership of the property passes to the buyer only after the payment of the last installment.
But how does this mechanism affect the taxation of real estate capital gains, especially in light of recent regulations related to the Superbonus?
In this article we analyze a recent response from the Revenue Agency, which clarifies the tax implications in such cases. Let’s find out together how the taxable capital gain is calculated and what are the relevant moments for its determination.
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The legislation on real estate capital gains
Article 67, paragraph 1, letter b-bis) of the Tuir, introduced by the 2024 Budget Law, provides for a new type of capital gain for the sale of properties renovated with the Superbonus.
According to this legislation, the capital gain is taxable if the transfer of the property occurs within ten years from the completion of the works. However, the exact moment in which the transfer occurs is crucial to determine whether the capital gain is taxable or not.
The Revenue Agency’s response no. 156 clarifies that, in a sales contract with retention of title, the relevant moment for the purposes of the capital gain is when the transfer effect of ownership occurs, or when the buyer pays the last installment.
This principle was also reaffirmed in resolution no. 28/E of 2009, which specifies that ownership of the property passes to the buyer only upon full payment of the agreed price.
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Practical case: donation and installment sale between siblings
The specific case analyzed by the Agency concerns a citizen who received as a donation in 2021 the undivided share of 50% of two real estate units, with the remaining share donated to his brother. Subsequently, the properties were renovated using the Superbonus.
The applicant’s brother then proposed to purchase the applicant’s share through an installment payment in 120 monthly installments from 2024 to 2034, using the sale with retention of title.
The applicant asked the Revenue Agency what the relevant date of sale was for calculating the ten-year period after completion of the works, which is essential for determining the presence of a taxable capital gain.
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The Revenue Agency’s response
The Revenue Agency has confirmed that, in the case of a sale with retention of title, the transfer is completed only with the last payment, as provided for by Article 1523 of the Civil Code. Consequently, the relevant date for the transfer of properties for the purposes of calculating the ten-year period is 2034, when the last instalment will be paid.
Article 1523 Civil Code
Transfer of ownership and risksIn the sale by installments with reservation of ownership, the buyer acquires ownership of the item upon payment of the last installment of the price, but assumes the risks from the moment of delivery.
Since in 2034 more than ten years will have passed since the completion of the renovation works, the case of taxable capital gain provided for by article 67, paragraph 1, letter b-bis) of the Tuir will not occur.
The Agency also stressed that, for this interpretation to be valid, the conduct of the parties must comply with the retention of title clause and not be reclassified as a simple deferral of payment.
Practical Planning Example
Let’s suppose that an owner renovated a property in 2022 using the Superbonus and intends to sell the property with a sales contract with retention of title. If the last installment of the price is paid in 2033, eleven years will have passed since the completion of the work.
According to the Agency’s interpretation, in this case, there will be no taxable capital gain, offering the seller a significant tax break.
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Conclusions
In short, the sale with retention of title means that the real estate capital gain is assessed at the time of payment of the last installment, which marks the actual transfer of ownership. This clarification is essential for all those who intend to use the Superbonus and subsequently sell the property, ensuring correct tax planning.
