A question that has been posed by a number of you in the past, so best we answer it for everyone.

The short answer is that like pretty much anything else in life it is possible, provided both parties are agreeable to the transaction.

Nevertheless, it is a process that is a more theoretical proposition than one that is actually realised.

It is also one more frequently carried out privately between two owners rather than through the auspices of an estate agent.

Inevitably, that considerably reduces the marketing options available to those who want to try and exchange their home.

Apart from the difficulties of finding a suitable exchange partner, one of the other major problems of exchanging properties is getting an objective valuation of each property.

At the end of the day, the only way to test the real value of the property is to put it on the open market and see what offers are received.

Nevertheless, at least for exchanges within France, one of the key attractions is a reduction in the amount of stamp duty that is payable as, broadly speaking, it is only payable on one property.

In an exchange in which one property has a valuation of €250,000 and the other a valuation of €200,000, stamp duty and notaire fees are payable on the second property.

The amount of stamp duty is the usual 5.09%, together with notaire fees of around 1%. These costs are shared equally between the two owners.

The difference in value between the two properties of €50,000 is dealt with by one party handing over the balancing sum to the other. On this sum they alone will pay stamp duty and notaire fees.

However, the French tax authority may well require that there is an independent valuation of the properties, particularly if capital gains tax may be payable on either of them, so there is this potential cost to factor into the equation.

International Exchanges

It is also possible to do an exchange of properties across frontiers.

Trevor Leggett of Leggett Immobilier, based in the Dordogne, has a site dedicated to international exchange properties and has carried out six such transactions in the last two years.

Nevertheless he says that ‘It is a much more lengthy process, and can take up to 6 months or more, whereas a normal sale takes around three months. It is much quicker if they own their properties outright and there is no mortgage involved as this complicates it even more.'

In addition, with international exchanges the benefits of lower transactions costs do not occur, as there are legal and valuation fees that are payable on both sides, as well as agents fees shared between the two parties. Stamp duty is also payable in the case of UK properties.

Leggett Immobilier will be at The French Village, A Place in the Sun Live Property Exhibition at Birmingham NEC 30th Sept - 3rd Oct, for those who would like to discuss an international exchange option with them.