Property swap

A property swap is a good solution for many people. It is an excellent way to solve problems with location, as well as with the size of a flat or house. Find out now whether tax is payable on a swap of residential premises and when you can decide to do it.

Property swap agreement

By concluding a swap agreement, each party undertakes to transfer ownership of an item to the other party in exchange for the other party's undertaking to transfer ownership of a different item. The owner disposes of one property while acquiring another at the same time. The transaction is cashless, but a form of income does arise here. It is a form of disposal of assets for consideration. A swap agreement is consensual in nature, which means that the agreement is concluded at the moment a written or oral declaration is made. The agreement may state when the property will be handed over.

The document in question resembles a sales agreement. The Civil Code provides that a swap is made for consideration and obliges the parties to carry out a disposition. This agreement must take the form of a notarial deed (akt notarialny). If we own a flat or house outright, we do not need consent to swap the premises. If there is a mortgage, the bank's consent will be necessary.

Property swap and tax

The costs of a property swap are much lower than those of a sale. The notary's fee is charged only on the flat of higher value. The costs should, however, be shared between both parties to the swap. Remember the obligation to pay civil law transactions tax (PCC), which is 2% and is paid on the difference in value between the premises being swapped.

Market prices are taken into account. If the transaction is between members of a family, we may apply for a tax exemption. Another issue is income tax. The situation is analogous to a sale. If the swap takes place within five years of acquiring the residential premises, 19% tax must be paid by the end of the year in which the new property was acquired.

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Who is a property swap for?

A swap agreement for residential premises is much rarer than a sale. It is a solution for people who want to live in a flat of a different standard but who may have trouble selling the property they currently own.

Flats bought around 2007 may have a very low market value. Selling them is difficult, and the proceeds may not cover the cost of another flat, even a much smaller one. This makes it an attractive solution for property owners who want to move to a new place without putting in any additional money.

Are you interested in other matters connected with property market transactions? We invite you to contact the staff of the estate agency REMAX Gold in Katowice.