What is real estate exchange?

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Sometimes we hear about the real estate exchange and many people do not actually know what it is or how it works. With this article, we try to shed some light on this topic.

Let's start with the definition.

Our Civil Code devotes an actual article to the exchange: It is Article 1552, which states: 

... "Exchange is the contract which has as its object the mutual transfer of ownership of things, or other rights, from one party to another."..

Usually the buying and selling of real estate is economic in nature, which is a fundamental element in defining itself as such. As for the exchange, on the other hand, there is a real " barter " between two properties so there is no payment of a cash price, but simply the exchange of houses between two owners (pure exchange) .

In reality, however, it is very difficult for the two properties being exchanged to have the same value. So for the purpose of a fair exchange it is necessary for the owner of the less valuable property to make up the difference in price by paying an adjustment (exchange with adjustment) .

Let us, then, make the different types of trade-in clear:

  1. Pure exchange : exchange of real estate with the same value;
  2. Trade-in with adjustment : exchange of two properties with different value so it is necessary to pay a difference;
  3. Direct exchange : exchange of real estate between two private parties : taxes payable are calculated on the property with the highest value. Expenses are then divided in half;
  4. Indirect exchange : refers to the exchange of real estate separate transactions.

What are the advantages of choosing real estate exchange?

The exchange allows you to save on notary fees because, unlike classic buying and selling where you have the drawing up of two separate deeds, one to sell your house and one to buy the new one, here the deed to be drawn up is only one, since you are in fact exchanging one apartment for another. Typically, the costs are split in half between the parties, who have every interest in reducing these kinds of costs. 

The taxes to be paid then will be:

Registration tax at 2% (if it is first house) or 9 % (if it is second house)

Land registry tax and mortgage tax are 50.00 euros each

To be specified that stamp duty, special cadastral taxes and mortgage fees are null and void if the exchange is between private parties.

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