Changing primary residence: selling before buying or vice versa?

Are you a property owner considering selling your main home and buying a new one? The reasons could be many and varied: career changes, family developments or simply the desire to make a fresh start. Many people find themselves in this situation and naturally ask themselves questions about the practical and financial aspects of this project.

Is it too early to sell your primary residence? Should you wait until you have repaid more of your mortgage? How will this decision affect your tax situation? We address these crucial questions to help you see things more clearly.

When does it make sense to sell your main home?

In theory, there are no hard and fast rules about when you can sell your main home and buy a new one. However, it is generally accepted that it is best to wait at least five years to amortise the major costs associated with your investment. If your personal situation does not allow you to wait, do not hesitate to seek the help of property experts to optimize your decisions.

If you sell earlier than expected, you may not have had time to amortize notary fees, agency fees, credit insurance and any repair, renovation and maintenance costs. This is why it is often considered that you are "losing money".

Taxation and mortgages: what you need to know ?

Selling before buying: advantages and disadvantages

If you sell your main home before buying a new one, you will have capital to help you buy your future home. This approach also avoids the temporary costs of owning two properties.

However, this option requires you to find temporary accommodation before you own your new main home.

Is it better to buy before selling?

Buying a new property before selling your current main home gives you more time to organise your move. For example, if work needs to be done, you can do it without having to live there. This strategy also avoids the need to find a temporary rental property between selling your first home and buying the new one.

However, there are additional risks associated with this solution. Until you sell your current property, you don't know how much you'll get for it, and the amount you get may not be what you expect. In addition, you may need an additional loan to finance the purchase of the new home, as you will not have received the capital from the sale of your former main home.

How will this affect my tax situation?

If you sell your main home to buy a new one, you must declare the transaction to the tax authorities. The tax treatment depends on how long you have owned your property: more or less than 2 years. If you have owned your property for more than two years, you may be entitled to a total exemption from capital gains tax. On the other hand, if you have owned the property for less than two years, the exemption does not apply and you will have to pay tax on the capital gain realized at the time of the sale.

In conclusion, the decision to sell your main home and buy another depends on many factors, such as how long you have owned the property, your financial situation, your housing needs and the state of the property market. It is important to take the time to evaluate the pros and cons of each option and to consult with property professionals to help you through the process.