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Private house swapping

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  • 21-05-2009 8:42am
    #1
    sparkyjo
    Closed Accounts Posts: 88 ✭✭


    i was just wondering is there any websites in ireland for swapping houses and if so does any know whats involved

    any help appreciated


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    sparkyjo wrote: »
    i was just wondering is there any websites in ireland for swapping houses and if so does any know whats involved

    any help appreciated

    I am not aware that there are websites with this any longer. The changes in the tax regime last year- made it prohibitively expensive from a tax point of view- up to that point it could be done on a neutral basis, as long as there was no cash involved.


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    #3
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    Yep, it's quite messy. Swapping houses is not like swapping other material items, or even wives!
    There are tax implications and stamp duty is payable by both parties, even if no money has changed hands.


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    #4
    zac8
    Registered Users Posts: 530 ✭✭✭zac8


    Don't know anything about it but here's a site I saw mentioned in a paper recently - http://www.myswap.ie


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    #5
    jmayo
    Registered Users Posts: 13,186 ✭✭✭✭jmayo


    How does mortgage swap work, is it simialr to scenario of you actually buying another house ?
    I presume that bank only happy if valuations similar due to way house market going ?

    This process does seem to be pretty popular in the US as a way of moving cross country when you can't sell your home.

    I am not allowed discuss …



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    #6
    dats_right
    Registered Users Posts: 1,168 ✭✭✭dats_right


    I've never come across it in practice, but it is not possible to simply swith a mortgage from one property to the other. The only way to structure such a transaction would be for both parties to take out a new mortgage over the properties to be swapped, in much the same way you would if you were buying, and use the proceeds to redeem the existing mortgages. Also conveyancing and other legal fees e..g. disbursements and outlay would be the same as if you were selling and purchasing, so for all these reasons there is no advantages in terms of saving fees or taxes so swapping is an unpopular method of moving.


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    #7
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    Well, I imagine a deal can be struck with a mortgage lender so that money doesn't necessarily have to change hands, but the mortgage is simply swapped from one property to the other, and inflated in the case that the swap is part-cash.

    The whole thing hinges on having solicitors who will handle the thing properly and reliably. The last thing you need is to find out in 25 years time that the deeds of your house were never properly transferred to you, or that there are two mortgages secured on your home.

    For some reasons it seems a whole lot simpler to just say, "I'm buying your house and you're buying mine" and treat the whole thing as a normal house sale x 2.


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    #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Up until recently it was in fact possible to simply swap property- and it was commonly done as a mechanism for minimising tax liabilities. This 'loophole' was closed in the 2008 Finance Bill.

    S.


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    #9
    dats_right
    Registered Users Posts: 1,168 ✭✭✭dats_right


    seamus wrote: »
    Well, I imagine a deal can be struck with a mortgage lender so that money doesn't necessarily have to change hands, but the mortgage is simply swapped from one property to the other, and inflated in the case that the swap is part-cash.

    1. No it would not be possible to switch mortgages in this way, because the Mortgage Deed that was signed and registered on the title when the property was first purchased is a legal document and specifically refers to the original owners and property, it cannot be informally transferred. It is therefore not possible to merely switch that mortgage in this way because the legal mortgage deed would not have any legal effect over the second or swapped property. The only way to structure the transaction relating to the outstanding mortgages is as I've already stated.

    2. No money would 'change hands' as such rather the proceeds from the new mortgage would be immediately utilised by the solicitor to pay off the mortgage on the original property and register this new mortgage over the swapped property and the other party would do likewise.


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    #10
    woolyhat
    Registered Users Posts: 135 ✭✭woolyhat


    dats_right wrote: »
    1. No it would not be possible to switch mortgages in this way, because the Mortgage Deed that was signed and registered on the title when the property was first purchased is a legal document and specifically refers to the original owners and property, it cannot be informally transferred. It is therefore not possible to merely switch that mortgage in this way because the legal mortgage deed would not have any legal effect over the second or swapped property. The only way to structure the transaction relating to the outstanding mortgages is as I've already stated.

    2. No money would 'change hands' as such rather the proceeds from the new mortgage would be immediately utilised by the solicitor to pay off the mortgage on the original property and register this new mortgage over the swapped property and the other party would do likewise.

    What if neither have a mortgage?


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