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The real estate exchange is a tool for purchasing a home that has been receiving increasing attention in recent years. It is a real exchange of properties that guarantees significant savings compared to a normal purchase and sale transaction.

But how does it work specifically and how do you complete this transaction? If the information you've gathered so far is confusing, don't worry: Casavo will help you complete your first exchange transaction.

What is a real estate exchange

The exchange of real estate is in effect an exchange of ownership of two homes. Article 1552 of the Civil Code defines it as follows: “it is the contract whose object is the reciprocal transfer of ownership of things, or other rights, from one contracting party to another.”

In a certain sense, the exchange contract regulates the oldest form of transaction in the history of humanity: barter. In this specific case, two parties transfer ownership of a property to each other, producing the same legal effects as a sale

The fundamental requirement is the intention of both parties to transfer ownership of an asset in exchange for another of equal or at least similar value.

How a property exchange works

The first point of confusion for those approaching the idea of a property exchange is that there is not just one type. In this table we illustrate the different possibilities:

Types of property exchange

Pure exchange The valuation of the two properties is identical, so you are selling an apartment worth €100,000 in exchange for another with the same price. Exchange with adjustment The two assets have different values and it is necessary to compensate for the difference in money. If you sell your €100,000 property in exchange for one worth €120,000, you will have to add the missing €20,000. Direct exchange It occurs between two private individuals. Property exchange with a builder You decide to purchase a property under construction, transferring ownership of your apartment to the company on consignment. Exchange between legal entities The exchange takes place between companies holding a VAT number..

Exchanges between siblings frequently occur between private individuals, especially following an inheritance. When you lose a loved one, you may suddenly find yourself having to manage a real estate capital: in some cases, the heirs choose to focus on the sale of inherited homes, in others they agree among themselves to exchange ownership of the properties.

Requirements and advantages of the exchange

Now that we have a clearer idea of the main methods, let's understand what the requirements of the exchange are and the effective advantages it brings.

The fundamental condition for being able to proceed with the contract is that both parties demonstrate that they are effective owners of the assets and that there are no mortgages or loans in progress.

This single requirement is enough to conclude the exchange agreement with significant savings compared to traditional sales. Here are the main ones:

the costs and interest of a loan are eliminated with faster times, unless it is necessary to take out a mortgage for the adjustment;
there is a significant reduction in costs related to notarial deeds and tax burdens.

As you can see, by exchanging properties you can cut the time and costs required to sell and buy a house; but how much can you save exactly? The costs to consider depend on several factors: let's find out what they are.

The costs of a real estate exchange

Let's start with an analysis of the general costs to be paid in a property exchange between private individuals.

The main difference to underline compared to a normal sale is that the costs are calculated on a single transaction and not on two separate operations.

The notary fee for a real estate exchange therefore concerns a single deed, to be divided between the two parties involved.

The same applies to the taxation for real estate exchanges in 2021. Unlike what happens in a normal sales contract, the costs are divided between the two contracting parties and are not borne solely by the buyer. Furthermore, the registration, land registry and mortgage taxes are calculated only once.

The total tax burden is therefore made up of these three items:

€50 for the land registry tax;
€50 for the mortgage tax;
the registration tax, which, according to article 43 of the Consolidated Law on the registration tax, is calculated based on the higher of the cadastral values of the two assets.

When calculating the cost of the rogito notarile The tax amount is set at 2% of the cadastral value of the property for a primary residence, and rises to 9% for secondary residences. If you are purchasing a property through exchange as a second home, the law requires that you always consider the highest tax rate when determining the costs of the property exchange.

Home exchange with a real estate agency: how it works and how the commission is calculated

When exchanging properties through a real estate agent, the cost of commissions must also be considered.

In this case, the agency in charge is responsible for estimating the value of the homes offered for exchange, preparing the contracts, and mediating between the parties involved.

The compensation for the intermediation is established by a free agreement between the parties. The most common convention for a real estate exchange is that the commission calculation starts from the property with the highest cadastral value – as with the registration tax – and that both parties pay the full fee. If, for example, the agency fees amount to €1,000, the total to be paid will be €2,000.

Exchange on consignment with a builder

Up to this point, we have analyzed the main characteristics of the exchange between private individuals; now let's take a moment to focus on the exchange on consignment between a private individual and a company. As shown in the previous table, you can decide to exchange a property you own for another under construction by reaching an agreement directly with the builder.

In this case, therefore, you are selling your house on consignment to purchase another that is still under construction. Typically, the main advantage of this choice is the significantly lower valuation than the market average. The construction company is willing to sell the building at a lower price to ensure it doesn't have to pay for it once the work is completed and to start recovering the project costs by purchasing another property ready for sale.

In terms of taxation, in 2021, the real estate exchange with the builder presents some differences compared to the exchange between private individuals.

The construction company, in fact, must also consider VAT for sales transactions, while the registration tax for companies has a fixed value. The following items must therefore be considered for the property sold by the builder:

VAT equal to 10% of the value of the property, which reaches up to 22% for luxury properties (cadastral categories A1, A8 and A9);
registration tax of €200;
land registry tax of €200;
mortgage tax of €200.

As regards the private individual, the same provisions that we have already seen apply, therefore €50 for land registry and mortgage tax, and the registration tax calculated on the basis of the cadastral value.

Trust Casavo to exchange your home

Finding the ideal properties for an exchange can be really complex. If you don't already have a rough agreement for the exchange, you may have difficulty finding someone interested in swapping apartments.

Don't worry, we'll help you! Casavo offers a series of unique benefits to anyone who wants to buy or sell a home, including through the real estate exchange system.

If you want to sell your property and don't know where to start, try our free valuation service to get a professional estimate at no cost to you. It will be an excellent starting point for understanding the exchange value for a trade.

And we can do much more: if the house you want to sell is located in Milan, Rome, Turin, Bologna, Florence, or Verona, send us a request and we could be the ones to purchase your property or propose an exchange. This way, you don't waste time looking for a buyer and complete the sale in thirty days!

For those looking for a home, our platform is full of high-quality listings for the exchange of the house through real estate agencies carefully selected by our staff, with high-definition photos and the most advanced technologies in the sector at your service. At Casavo, we've made innovation one of the strengths of our working method. That's why we offer you the opportunity to visit properties remotely, directly from your smartphone or computer screen.

All our services are available to you even if you want to exchange your property. Write to us now for details: we can't wait to help you find your ideal home, even if you trade it in!

Confused about real estate swaps? Casavo can help!