A FEW WORDS ABOUT REAL ESTATE
6 February 2019
At the moment when the current housing conditions are no longer enough for us, or when the apartment for some reasons turns out to be too tight for us, then, apart from selling and buying a new flat, you can try to convert. This is an interesting solution for those who own a flat, but at the same time they do not have adequate creditworthiness, or simply do not want to be obliged to the bank for a dozen or so years. Such an option may turn out to be much less complicated and formalized than a buy-sell transaction.
The real estate conversion can be defined differently by a double sale transaction. Thanks to one contract, two sellers exchange their properties. Such transactions become a popular solution on the Polish real estate market.
Those interested in such a solution may be people who have a currency loan for the purchase of real estate, and who face a significantly increased loan installment due to the unfavorable exchange rate. Selling an apartment at such a moment is an unprofitable option due to the fact that the sum obtained from the sale may not be sufficient to cover the repayment of the loan. In turn, when exchanging an apartment, it is possible to transfer the mortgage, and thus the loan, to another, newly acquired property.
This option may also be of interest to older people, who are not satisfied with the funds for maintaining the flat in which they currently live, or who would like to limit these costs. Admittedly, they may use the so-called reverse mortgage, but this is related to the transfer of ownership of the property to the bank in exchange for a monthly pension. Not everyone decides to give up ownership. In this case, you can turn your property into a smaller one, at the same time gaining some cash from the difference resulting from the value of your apartment and the flat being converted. Thus, when making a transaction, we will still be the owner of the property (so much as another) that we will be able to donate to the family in the future.
It is also an alternative way for people who want to convert their large apartment or house into two smaller ones, for example at the time of divorce.
Advertisements for this type of conversion are quite a lot. This process is most efficient when both of the converted properties are ownership. In this case, a contract is concluded for the transfer of ownership of one flat, in return for the obligation to transfer ownership of the other.
Such an agreement, such as all real estate, must necessarily take the form of a notarial deed for its validity. You should choose a notary public with a copy from the land and mortgage registers of both properties. In addition, the parties should have:
- Identity Cards,
- documents confirming the possession of a legal title to real estate (eg an extract of a notarial deed of sale or a court decision confirming the acquisition of an inheritance),
- certificates from the housing community about the lack of arrears in rent and maintenance fees,
- certificates from the commune office on the lack of arrears in property tax,
- certification of persons registered in the premises,
- landowner’s certificate (eg municipality) about no arrears in fees for perpetual usufruct of land (if applicable).
If there is a difference in value between the parties to the transaction, the person who purchases the more expensive flat must pay the difference. This information should also be included in the notarial deed.
The advantage of such a solution is much smaller than when selling the total transaction cost. At this time, the tax is not paid in the amount of 2% of the value of the property being purchased, but the difference in the value of the property. A notary’s tax is charged on the value of a more expensive real estate, but as a rule, the parties divide the cost between themselves in half. As a result, savings can reach even tens of thousands of zlotys.
In addition, there is no time problem, ie the seller’s concerns that he will not be able to find a new home before handing over to the buyer premises. In this case, the parties agree on the day of the exchange of apartments and moving house.