The coronavirus crisis has changed the preferences of many Spaniards: some choose to look for a house on the outskirts of big cities, others prefer the center of the city to reside. But the operation of selling the main home to buy another is not without complications: hiring a new mortgage, canceling the old one, etc.
What is the situation of the real estate market? it is important to know well the evolution of the amount and also the terms of deal
corresponding to the neighborhood of the house to be sold. It is also recommended to study what is the forecast of the evolution of the value of the properties for the coming months (in case it should wait), as well as to consider the possibility of including in the search for the new home those booming locations that are in expansion process. Although currently they are not very attractive, they bid the moment to buy at a good amount, allowing to obtain a greater profit during the process, since the profits from the deal of the previous property will be higher than the amount of the new purchase. Not to mention that, over time, this new home will be revalued because it is located in a developing location.
How to sell a house if a mortgage is still being paid?
In this case, the best thing is to sell first, pay off the due and apply for a new mortgage allowance to face the purchase of the new house. If you have the necessary purchasing power, there is also the option of applying for a new mortgage and taking charge of both at the same time until the deal comes to fruition. Another possibility is to hire what is known as a “bridge mortgage”, a mortgage allowance that allows you to change from one property to another without having sold the previous one and without the need for savings. Finally, there is the alternative of negotiating with the bank a subrogation, through which the mortgage of that property will be in the name of the new owner.
If you do not have a previous mortgage, what is better: sell first or wait until you have found your new home?
The ideal is to be able to do everything at once. That is, finding the right buyer and finding the ideal home to buy, all at the same time. To achieve this, you can try to agree in the deposit contract the final closing of the deal within a specified period. It is recommended to request a period of 4 or 6 months, in this way, you will have the peace of mind of having found a buyer and will have enough time to locate the right home and carry out some type of reform if necessary. If this is not possible and you have enough savings to face the new purchase (that is, 20% of the property amount + 10% of the expenses), you can request a mortgage allowance and, once paid the deal of the current home, pay off the due.
How to correctly plan the deal of the property?
Selling a property requires organization. This includes factors such as: finding a good intermediary to help and advise during the process, the realization of possible reforms or arrangements that help to revalue the property, gather all the information and documentation that the interested parties may request (plans of the property, deed of housing, certificate from the community of owners, energy efficiency certificate, certificate of Technical Inspection of the Building -ITE.-, habitability cell, last IBI receipt, certificate of pending balance of the mortgage or certificate of zero balance, last receipt of supplies …), take good pictures of the house or correctly appraise the property.
How will the deal of the home affect the income tax return?
As it is a case of more asset of the habitual residence, since all or part of the money obtained from the deal of the habitual property is destined to the purchase of a new home, it will be exempt from facing the tax, always that the total amount obtained by the transfer is reinvested in the acquisition of the new property. In the event that the amount reinvested in the purchase is less than what has been obtained in the deal, only the proportional part of the profit obtained that corresponds to the amount that has been used for the purchase of the new one will be excluded from taxation. living place.
What other expenses does selling a property entail to buy another?
Apart from the tax, there are other expenses that should be taken into account before starting the process: Municipal Capital Gains Tax (depends on each municipality and is calculated based on the increase in the property’s equity value during the time in the one who has owned it), purchase deed expenses when selling the property, expenses derived from the possible liquidation of the mortgage in progress, real estate commission (if applicable), expenses resulting from the request for certificates or information related to the home you want to sell. Regarding the expenses arising from the purchase of the new house, you must pay the housing transfer tax for the purchase (AJD, VAT or ITP), possible need to constitute a new mortgage, moving expenses or, if applicable,
To avoid making any mistakes during the process, it is best to consult with a real estate expert who gives good advice and overture enough information to pay off the deal and purchase successfully. This is especially important in those cases in which there is an urgency to change the property.
Live Home Network Club Team.