Property Swap (Permuta)

In a property swap (permuta), the parties exchange properties of similar value, with or without a cash balancing payment (a “torna”). Unlike a sale, a swap is an exchange contract governed by the Civil Code (art. 533) and has specific tax treatment.

For an individual, a swap without a balancing payment does not generate a taxable capital gain — the property received takes on the acquisition cost of the property given up. If there is a balancing payment, only that amount factors into the capital gain calculation. For developers, swapping land for finished units is a common way to fund projects without spending cash.