The Villa Ludovisi and most of its extensive grounds were sold in 1883 to a property developer, the Società Generale Immobiliare, which in 1885 divided the property into luxury building lots.

The family retained a small portion of the original estate around the Casino di Villa Boncompagni Ludovisi (Villa Aurora), the only building from the original holdings that was not demolished.

The Boncompagni-Ludovisi family occupied the house for barely a decade before being forced to sell it in 1900 due to further economic difficulties, including some due to the high cost of the new palazzo itself.

After the assassination of King Umberto I in Monza in 1900, his son and successor King Victor Emmanuel III purchased the palazzo from the family as a suitable residence for the newly widowed Queen Margherita, who took up residence in the palazzo on Christmas Day, 1900 for the remaining 26 years of her life.

The palazzo was extensively renovated between 1949 and 1952 to restore rooms to their earlier appearance, while also modernizing plumbing and heating systems and increasing office space.