"Construction project with a 'special' initial situation"

Morning. I would be interested again in which role my house can play in the whole matter, or how I can make it financially useful for myself, apart from selling it.

...from Eiphone

Hello, we had the same problem last year,
our house built in 1998, the buyer commissioned the expert.

We also still had a loan running which the buyer wanted to take over. A well-known notary advised us against it. So we paid off the loan, but with prepayment penalties, however, since our interest rate at the time was 4.6% and with the new financing it was 1.9%, we decided on this option (although the house bank gave us by far the worst offer, so do not fixate on the house bank).

We solved the handover of the house as follows: we were very accommodating to the buyer price-wise (since they will not live in the house themselves but will let it run as a rental property). We can still live in the house rent-free for 1 year from the purchase date, which was set in writing.

moiin,

can someone explain to me again more precisely the possibilities of a "bridge financing"? meaning if my equity is still tied up in the form of the not yet sold property.

are there also options to keep the house and rent it out and still somehow use it as a "trump card" in the new project?

thanks

Regarding the selling price: Did you live in the property exclusively yourselves and use it yourselves? If not, speculation tax may apply (exceptions are listed below):

[*]the property was used exclusively by yourself during the entire period between acquisition and sale or [*]at least in the year of sale and the two preceding years was used exclusively by yourself.

Regarding the selling price: Did you live exclusively in the property yourself and use it personally? If not, capital gains tax could apply (exceptions are listed below):

[*]the property was used exclusively by the owner themselves for the entire period between acquisition and sale or [*]it was used exclusively by the owner themselves at least in the year of sale and the two preceding years.

Yes, lived there myself since purchase in 2010 and that will remain the case until the sale.

moiin,

can someone explain to me in more detail the possibilities of a "bridge financing"? meaning, if my equity is still tied up in the form of the property not yet sold.

are there also possibilities to keep the house and rent it out and still somehow use it as a "trump card" in the new project?

thanks

1. Bridge financing: You receive a loan equivalent to your (expected) profit. This loan has a short term, e.g. one year, and is not repaid during this time. At the end of the term, the loan is repaid from the proceeds or profit of the sale. It is intended as an advance/bridge financing of your currently still tied-up equity in property.

2. House as a trump card: You offer the rented house (which increases your income) as collateral to the bank that also finances your new house. You then get a correspondingly higher loan than if you only encumber the new house and bring in cash (which also increases the total installment). Depending on income from rentals and the level of loan interest, this can also be tax advantageous. However, this should be discussed better with a tax advisor (also e.g. a possible division of the loans and allocation to the rented house).