Secrets about the real estate exchange revealed! Don’t miss out on this must-see information!

The exchange of real estate — sometimes referred to as a barter or swap — is a legally regulated transaction in North Macedonia governed by the Law on Obligations and the Law on Property Taxes. Unlike a sale, no money changes hands as the primary consideration; instead, each party acquires ownership of the other’s property. Despite this difference, the legal framework for exchange largely mirrors that of a sale. This page is part of our practice in real estate and construction law. For related questions about real estate due diligence, see our guide on real estate transactions in North Macedonia.

The exchange of immovable property according to the Law on Obligations, or the exchange according to the Law on Property Taxes, is a legal transaction in which each contracting party commits to the other to hand over ownership and possession of the real estate being exchanged, with the ultimate goal of acquiring ownership of the other party’s property. With its ultimate goal — the exchange of ownership rights over real estate — the exchange has similar characteristics to the sale.

Although the sale represents the transfer of real estate in exchange for money, the exchange produces the same legal effect: the acquisition of ownership of property that belonged to the other party before the conclusion of the exchange agreement. For this reason, the Law on Obligations provides that with an exchange agreement, rights and obligations arise for each party equivalent to those that arise for the seller under a sale agreement, and the provisions of the sale agreement apply accordingly to the exchange.

Key Elements of a Real Estate Exchange Agreement

The main elements and facts that should be known about real estate exchange are:

1) Each party undertakes the obligation to hand over ownership and possession of their real estate to the other party, as well as the obligation to receive ownership and possession of the other party’s real estate.

2) The exchange, by its very nature, is a legal transaction in which the obligation to pay money as consideration for acquiring ownership of real estate is omitted.

3) As with a sale, the risk of damage to the real estate transfers upon handover of the property to the possession of the other party, and each party is responsible for material defects in their property that existed before the handover.

4) Unless the parties have agreed otherwise, the handover of the real estate is carried out simultaneously.

5) The exchange agreement must be concluded in writing and, since the law provides for notarization, it must be properly taxed before the competent authorities and then notarized by a competent notary.

6) Tax liability arises on the day the contract is concluded. The tax base is the difference in the market values of the exchanged properties as determined by the competent authority. The taxpayer is normally the party who exchanges the higher-value property, though the parties may freely agree on which of them will bear the tax obligations.

7) If the properties subject to exchange are located in different cadastral municipalities or cities, the competent authority for confirming the contract is a notary in the territory where each property is located, and the tax authorities (municipalities) competent for those territories will, in mutual administrative cooperation, carry out the procedure for the assessment of the properties.

What the Parties Should Check Before Signing

The parties should pay attention to the mandatory conditions established by law when entering into this transaction. As the most important steps to be taken before signing, we highlight:

1) Inspection of the real estate subject to exchange.

2) Review of the title deeds for the real estate subject to exchange and confirmation that there are no restrictions on the transfer of ownership.

3) Determination of whether there is a difference in the values of the properties and the need for a possible surcharge.

4) Determination of which party will bear the tax obligations.

Practical Checklist

Before signing a real estate exchange agreement in North Macedonia, complete the following: (1) Inspect the property you are receiving — physically inspect the real estate offered by the other party. Verify its condition, boundaries, and any encumbrances not visible from the register. (2) Check title at the Cadaster — verify that the other party is the registered owner and that there are no mortgages, liens, easements or other restrictions that would prevent or encumber the transfer of ownership. (3) Obtain valuations of both properties — establish the market value of each property to determine whether there is a value difference and whether a surcharge is needed. The tax base will be calculated on this difference. (4) Agree on tax allocation — confirm in writing which party bears the property exchange tax obligations. The default is the party exchanging the higher-value property, but this can be agreed differently. (5) Check for multiple cadastral municipalities — if the properties are in different municipalities, be aware that separate tax authorities will be involved. Allow additional time for the procedure. (6) Ensure written form and notarization — the exchange agreement must be in writing and notarized by a competent notary. An unnotarized agreement has no legal effect for the transfer of ownership. 

Frequently Asked Questions

What is the difference between a real estate exchange and a sale?

In a sale, one party transfers ownership of property in exchange for money. In an exchange, each party transfers ownership of their property to the other — with no monetary consideration as the primary element. Despite this difference, the Law on Obligations provides that the legal rules applicable to a sale apply to an exchange by analogy, including rules on defects, risk of damage and delivery.

Is a real estate exchange agreement subject to tax in North Macedonia?

Yes. The exchange of real estate is subject to property transfer tax in North Macedonia. The tax liability arises on the day the contract is concluded, and the tax base is the difference in the market values of the two properties exchanged, as determined by the competent authority. The tax is normally paid by the party exchanging the higher-value property, but the parties can agree to allocate the tax obligation differently.

Does the exchange agreement need to be notarized?

Yes. The exchange agreement must be concluded in written form and notarised by a competent notary in North Macedonia. The notarization step also requires the agreement to be properly taxed before the competent authorities prior to notarization. An agreement that is not notarized has no legal effect for the transfer of ownership.

What happens if the properties have different values?

If the market values of the exchanged properties differ, the parties typically agree on a surcharge — an additional payment by the party receiving the higher-value property to compensate for the difference. The existence and amount of any surcharge should be clearly specified in the exchange agreement. The tax base is calculated on the value difference.

What if the two properties are in different cities or municipalities?

If the properties subject to exchange are located in different cadastral municipalities or cities, the procedure is more complex: each property requires the involvement of the relevant municipal tax authorities to assess the market values. This adds time and coordination to the process — factor this in when planning the transaction.

Last updated: July 2026

Note: The above does not constitute legal advice and in no way can be accepted or understood as an instruction to act in a specific case. Each legal situation has its own characteristics that should be reviewed at separately, and for that reason we recommend that you contact a professional – a lawyer – for legal advice.