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Money Matters and Legal / Your Money

Permanent home exchanges: a quirky new way to acquire property

Home swap

A small but growing portion of French homeowners are embracing a clever and original method of moving house, consisting in lastingly switching property with someone else. How do these permanent house exchanges work and what are the rules?

While holiday home swaps have been around for a while, permanent property exchanges are slowly gaining in popularity. Nonetheless, this quirky method of new home ownership comes with specific guidelines and procedures.

Unsurprisingly, trading houses or apartments can only be done if both traded goods are equivalent in value. A central Parisian studio could thus be swapped for a house in the country, as long as both properties are of similar worth.

Otherwise, the owner of the cheapest home must pay a compensation corresponding to the difference in value to the other party. This does not necessarily have to be in the form of money: if both parties agree, compensation could instead consist of furniture or appliances left in the property.

It is also imperative that the properties exchanged are owned by their respective owners alone. In cases of joint ownership, the express consent of all owners must be obtained before a swap. Moreover, properties can only be exchanged if all mortgages on them have been paid off.

As innovative as it may be, this process does not remove the necessity of having the transaction notarized by a notaire, who must draw up an acte de vente, or sales act.

Trading one’s home will normally take far longer than selling it, due to process still being relatively unknown and because of the reasonable complexity of finding a suitable match.

However, this method presents a number of advantages. Firstly, it removes the need for two successive transactions when selling one’s property before buying a new home, combining two operations into one notarized act.

Next, it allows traders to benefit from reduced transfer taxes, as these are calculated relative to the cheapest good and split equally between both parties. Finally, it is also an accessible way to move home for households who do not have the possibility of getting a loan.

Homeowners who are interested in this peculiar stratagem can visit specialized sites such as echangedefinitif.com and echange-immo.fr to learn more about the process.

Photo credit: Echange-Immo

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