Prime Minister has announced a measure that is likely to raise concerns in the real estate sector. Starting June 1, 2025, French departments will be allowed to increase transfer taxes (DMTO) by 0.5%. While this increase is optional, it is highly likely to become standard practice across most departments. In the previous increase in 2014, 90% of departments implemented the change within the first year, and a similar scenario is expected to unfold this time.
The impact of higher notary fees on buyers and sellers
An average increase of €1,000 in notary fees.
For individuals, the rise in DMTO will directly translate into higher acquisition costs when purchasing property.
For example, for a property sold at €200,000, buyers can expect to pay approximately €1,000 more in fees.
A limited impact on monthly payments
Although this increase may be concerning, its effect on monthly mortgage payments remains relatively limited. A €1,000 rise has only a minor impact on borrowing capacity. To put it into perspective, the recent drop in interest rates since September has had a more positive effect on monthly payments than this increase in notary fees would have in the negative direction.
International Comparison: A Lesser Evil?
The situation in the united kingdom
By comparison, the British government recently implemented a similar measure, but with much heavier consequences. In October 2024, a tax reform was announced, resulting in an additional £2,500 in taxes for purchasing an average home. This is 2.5 times higher than the increase in France, making the impact of the DMTO rise appear relatively moderate in contrast.
Who benefits from the increase in notary fees?
Departments at the forefront
This rise in notary fees is expected to generate an additional €1 billion per year for French departments. These funds will help offset the decline in real estate transactions caused by rising interest rates. For local governments, it’s a way to boost tax revenues despite the slowdown in the market.
A controversial approach
Critics argue that this strategy further penalizes households in an already challenging economic environment. As one real estate professional noted: “It’s like a consultant doubling their commission to make up for a drop in revenue.”
How to minimize the impact of higher notary fees?
There are ways to reduce the effect of this increase on your acquisition costs:
- Negotiate Notary Fees: Certain fees, particularly those related to administrative formalities, can be adjusted.
- Deduct the Value of Furniture: If the property is sold with furnishings (e.g., a fitted kitchen or furniture), these items can be excluded from the taxable base for notary fees.
These strategies can lower the taxable amount and help reduce the total fees payable.
Conclusion: A Measure to Put into Perspective
While the increase in notary fees represents an additional cost for buyers, its overall impact remains moderate, especially considering the recent drop in interest rates. However, in a context where housing-related expenses continue to rise, it is crucial for households to anticipate these costs and explore ways to optimize them.
