Costs incurred if undertake straight swap from one apartment to another

[jackd]

Hi, if I undertook a straight swap from my modernised apartment with car parking space and storage unit (3 properties?) for a larger but, dated apartment. Would I just have to pay notary fees for change of ownership? Would there be other taxes, costS? Thanks for your time.

[freddo]

You would have to pay Transfer tax on the property

[jackd]

just for information,I would value both properties at 75,000 euros in Torrevieja outskirts area. Thanks for any advice. Trying to sell my property and then buying through the normal procedure not only is time consuming but, also the taxes and costs incurred almost doubles the difference in costs over the value of the other property and potentially makes the option not viable. Just trying to save costs if possible? Thanks in advance for any advice.

[fpegman]

Transfer Tax

Valencian Community: Raised from 8% to 10% in August 2013 with lower rates for certain resident groups like young buyers, disabled buyers, or buyers with large families
You would still have to pay Notary fees ans legal fees if using a solicitor but is you speak and understand Spanish you can do it your self I would not advise this

• This reply was modified 5 years, 6 months ago by fpegman.

[Yolanda P. – Ypama Abogados]

Hi,

This is called in Spain “permuta”.

Tax Administration deals with it as if there were two purchases at a market price (no matter the price you state for the “permuta”). So, taxes are the same as what you call the “normal procedure”.
The only costs that you save are in the notary, as this is done in just one “escritura”.

[Mark Roach – Spanish Tax Consultant & UK Limited Company Director]

Dear Jack,

To help a Buyer & Seller of a Spanish property save the 10% Spain property Purchase Tax on a swap or part exchange then this can be done in a Corporate structure.

If the sellers of each property invested their Spanish property into a separate UK Limited Company there is no 10% Spain property Purchase Tax.

Each owner can then sell their own UK Company with the property held within it so the buyer for each side does not pay 10% Spain property Purchase Tax, when buying the UK Company with property already held within it.

Also if both properties were sold in a normal way and they were bought under the Reviewed value then each buyer would have a 4 year time scale when Spain Tax office can ask for extra Purchase Tax.

Not only does the Corporate sale method save the 10% Spain Property Purchase Tax but it also avoids the 4 year Spain Tax Office investigation to the buyer in the normal way.

In addition to this the new owner of the UK Company can then resell the Company and supply any future buyers with the same benefits and Tax savings.

I hope this helps?

[Mtram]

Dear Mark,

What would be the annual costs of running a UK limited company having transferred a property into it?

Also what additional taxes (plus valia etc) would be due on transferring a property into a UK limited company and is there any way of lowering said taxes during transfer?

Finally, would this also apply to a Malta based limited company. Thanks.

 

[pisot]

Hi All

Interesting topic !

Have any of you sucessfully completed a Permuta?

Would I be correct that I would have to pay transfer tax of 8% (andalucia) on the new place and plusvalia on the old?

Thanks Tom

[Author]

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