swapping homes rather than waiting to sell
 

hi, and morning to all. Does this sound a good idea.. 1 villa in spain that probably wont sell for agesssssss. 1 english couple that desperatly want to move to spain, thing is why not swap houses or flat? I have just sent my estate agent an e mail to do just this, dont know what he will say BUT even if the house or flat is not where I would like it to be maybe I could rent it out and at least the english couple get to spain quicker, that way if all goes well all happy, does this sound ridiculous? pat

Re: swapping homes rather than waiting to sell
 

Not ridiculous at all, anything is worth a try. Builders do part exchange in order to sell on new properties. Good luck in finding a perfect match.

Re: swapping homes rather than waiting to sell
 

It is a good idea. Just one thing will anyone want to move/retire to Spain at this low exchange rate. If I was in the UK now I wouldn't consider it unless things change.

Re: swapping homes rather than waiting to sell
 

Have you thought about all the taxes involved in this?
You'll have to pay tax on the rent the english couple pay (or would pay) you for
living in your house and they'll have to pay tax on the rent you'll pay (or would
be deemed to pay) to them, for living in their house.
Now I know you'll say "ahh, but no money will change hands." That doesn't
matter. At least in the english tax system, you'll be presumed to be getting a
"benefit in kind" (i.e. something instead of money) and the tax will be calculated
on what that value is - or what the taxman assesses it as being worth.
Worse, when you do get to sell you house (or the english couple find a buyer
for theirs), since you aren't living there, it won't be your primary residence so
you'll get dinged for CGT.
I'd seek professional financial advice on all of this before proceeding. What
starts out as a nice idea to short-circuit the system could turn into a nightmare.

Re: swapping homes rather than waiting to sell
 

I thought what the OP meant was to swap completly. ie, exchange title deeds. There would still be tax to pay on that of course.:(

Re: swapping homes rather than waiting to sell
 

yep i did mean to swap houses so no money (as sucH) changes hands. In other words somebody might have a flat or house that is roughly worth our villa and just swap deeds , or something along that vein. I suppose it could work, the scenario could be something like
couple have a flat or house worth about £180.00 , they like my villa so although my villa is more expensive I accept their offer because I could be waiting years for a buyer....job done, all happy because although I have my own place in UK I could let out the other couples place,

Re: swapping homes rather than waiting to sell
 

I think it is a good idea.

Re: swapping homes rather than waiting to sell
 

Edmond's Estate Agents Branches all over Spain.A stuffed purple Dinosaur named Posh Paws is their logo. I have attached a pic of the staff at their Marbella office. :rofl::rofl:

Re: swapping homes rather than waiting to sell
 

In theory it sounds like a good idea Patsy I wonder if it's been done before and if so how it went. Chris is trying to sell up and get over, maybe you should talk to her and possibly arrange a house swap for a short period to test the water so to speak. Could work :)

Re: swapping homes rather than waiting to sell
 

i am open to all suggestions, but who is chris? thanks, pat

Re: swapping homes rather than waiting to sell
 

We too have thought of doing this - would be interested to know more.

Re: swapping homes rather than waiting to sell
 

Chrisw..." Estate agents, campaign to make them work! " ..........look for the thread.

Re: swapping homes rather than waiting to sell
 

Not sure if relevant but we "exchanged" homes in the UK in around 1992. We needed cash for buying a home in Spain (not relevant to the situation). We had a detached home worth around £75,000, the people we exchanged with had a small bungalow worth around £50,000 in the same area. They agreed to "Buy" our home and pay us the £25,000 difference. We bought their home. Their son paid the £25,000 and moved into the upstairs of our place and the elderly couple moved from their bungalow into the downstair of our place enabling their son to look after them. It worked out OK. Good luck with what you decide

Re: swapping homes rather than waiting to sell
 

The person who swops for a Spanish house will still have to pay the 10% or so buying fees here and as you will be the seller there may be CGT.

Re: swapping homes rather than waiting to sell
 

Hi - loads of people are looking into this now. We've come across dozens in Spain who are considering this, but finding a sensible exchange proves more of a challenge. As well as the CTG in Uk, taxes in Spain and fees etc (which all have to be found, of course), one of the first considerations is finding a mutually suitable swap with a fully legal property and a vendor who takes a realistic approach. This idea is definitely not for the faint hearted and you will get masses of unsolicited sarcastic 'advice' and 'guidance' on forums. It pays to be wary of offers to exchange that look too easy, or to good to be true - they're usually exactly so . We've looked at a couple of those but don't waste time with them any more as the vendors are usually pretty transparent, even though they don't think so.
An exchange won't short circuit the system but in the current climate, if we can find a permanent exchange for a property in Spain that stands up to legal scrutiny, then it is worth at least exploring as a way of dealing with a capital asset that in our case, would be more beneficial to us in Spain than the UK.

Re: swapping homes rather than waiting to sell
 

Have a look in the Classifieds Forum on here.

Re: swapping homes rather than waiting to sell
 

This is exactly what i am looking to do, and it seems like the most appropriate solution given the current climate in both property markets.

i have a 2 bed penthouse flat in the U.K that i currently let out for £690 a month.

The property is worth £150k so i would be looking for a swap that incurred no financial input...just a straight swap. i think this method would appeal to quite a few parties including those who have 'bought to let' in spain but are finding it it difficult(if not impossible) to do so, and to those simply looking to move home.

At the minute we have no idea where we would like to live in Spain so all offers will be seriously considered while we explore our options.

Curious? drop me a line [email protected] or call me on <<snip>>

Re: swapping homes rather than waiting to sell
 

hi why dont you e mail me at [email protected], pat

Re: swapping homes rather than waiting to sell
 

How would you get round paying the tax? All property transactions have to go through a notary!

Re: swapping homes rather than waiting to sell
 

Surely it could still go through a notary and appropriate taxes paid? It's only the same as you selling a house for £100k and then buying one for £100k, just that no actual money changes hands. The house will still have a monetary value.

I think it's a brilliant idea and definitely one we will be looking into when we come to sell.

Re: swapping homes rather than waiting to sell
 

Even though no money changes hands, in Spain at least, you will be liable for taxes. A price on the value of the house will have to be put on the deeds at the notary. On this price you will have to pay 7%, plus notary fees, plus lawyer's fees (if you use one).
You could all decide to put a minimum price on the house but make sure it is the same as, or more than, the catastral value. You wouldn't want the Spanish taxman coming after you for suspected under declaration on the value of the house.
If you decide to do it then make sure that you keep all the paperwork in a safe place.
I have scoured the internet in Spanish looking for this scenario and after 20mins have found nothing. It is not a common occurence in Spain.
I have however found this British site; http://www.swapmyvilla.co.uk/index.html
Hope it helps

Re: swapping homes rather than waiting to sell
 

It would need to be a lot more than the catastral value.

The tax office publishes a list of factors by which you multiply the catastral value to arrive at an "acceptable" price. This factor varies from town to town but is typically 2.5 to 3.5 times the catastral value.

Under declaration results in large fines and also they can claim that the difference in price is a "gift" and as such, subject to gift tax at very high rates.

All transaction details are now automatically run through the tax office computers to identify potential under declarations.