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Sale Cubature

The transfer of the right to drive volume, taxes and capital gains

Complete guide to the right to sell airspace, with evidence of the civil and fiscal aspects. The cubature represents an atypical real right, consisting in the building potential of a given land. The cubature differs from building law. The latter consists of the quantity of building area assigned by the Administration (Municipality or Region) to the owner of a land or a building. This assignment can have the objective of transforming or conserving the immovable property, or the character of compensation. Example, in the case of expropriation of other land owned by the same person.

Table of contents

  • The cubature assignment
  • Direct taxes on the sale of airspace between private individuals
  • Direct taxes on the sale of airspace between companies
  • How to calculate the capital gain from the sale of the cubature?
  • Numerical example for the calculation of the capital gain
  • Indirect taxes on the cubature transfer

The cubature assignment

The cubature transfer consists of a legal transaction that takes place between the owners of contiguous land, located in the same territorial area. Through this deed, the transferor renounces the building volume inherent to his own fund in favor of the transferee who, in this way, increases his right to build. The Court of Cassation (sentence no. 10979 of 2007) clarified that the sale of airspace is similar to the sale of real estate, and is subject to all the obligations deriving from it. The sale must therefore take place by public deed which will then be registered, by the notary, within 30 days of signing it and reported to the land registry with the change in owners.

Direct taxes on the sale of airspace between private individuals

AIDC (Italian Association of Chartered Accountants) intervened on the subject of direct taxes resulting from the purchase and sale of the airspace. 189/013, dictated precise rules. In particular, the Association has assimilated this sale to that relating to building land. If the deed takes place between private individuals, who do not act under a business regime, the capital gain arising from it must be taxed as a different income (art. 67 TUIR).

It follows that the capital gain is always taxable and contributes to the formation of the relevant income for IRPEF purposes.

Direct taxes on the sale of airspace between companies

cession of cubage

The capital gain deriving from the sale of the right volume, which takes place between subjects exercising business activities, follows the rules of direct taxation provided for by art. 85 and 86 of the TUIR.

In particular, if the land is entered among inventories (i.e. it is considered a “commodity good”), the gain resulting from the sale of part of its cubic volume is an operating income, to be fully taxed in the year of its construction. Conversely, if the land is entered among fixed assets, there is a capital gain, which can be taxed in 5 constant annual installments.

How to calculate the capital gain from the sale of the cubature?

The gain resulting from the cubature transfer, when it is not to be considered as business revenue, represents a capital gain. This is given by the difference between the consideration for the sale and the fiscally recognized cost of the cubage sold. In other words, the purchase price increased by the costs inherent to the same. This value must be revalued on the basis of the ISTAT annual index of “consumer prices for families of blue-collar and white-collar workers” (updated values on this page). In addition, the possible INVIM paid up to 2001 must be increased. When the urban use of the land varies owned by the buyer, an expert must intervene to determine the value of the volume sold.

Numerical example for the calculation of the capital gain

Let’s clarify what has just been stated with an example. Let’s assume that the purchase cost of land is 30,000 euros. Let’s also assume that the market value of the land net of part of its airspace amounts to 60,000 euros, and that the consideration agreed for this airspace is 40,000 euros. To determine the fiscally recognized cost, proceed as follows: 40,000x (60,000 + 40,000) = 40%. This is the percentage of the purchase cost of the airspace being sold: this percentage must be applied to the total purchase cost (30,000 × 40% = 12,000). The capital gain from the sale of the cubature will be equal to: 40,000-12,000 = 28,000.

Indirect taxes on the cubature transfer

With regard to indirect taxation, if the transferor is a VAT taxable person, the tax at the ordinary rate of 22% is applied to the sale. In this case, the registration and ipocatastal taxes   will be applied at a fixed rate (200 euros each). If the seller is a private individual not subject to VAT, the registration tax will be applied on the sale in a proportional way (rate of 9%) and the land registry tax in a fixed measure (50 euros each).