Faced with the controversy sparked by the announcement of an increase in transfer taxes for payment (DMTO), the government could spare certain buyers. The Prime Minister's office confirmed to several media outlets that exceptions would be put in place. A decision which aims to ease tensions in a real estate market already under pressure.
Borrowing rates noted on 11/26/2024
First-time buyers: strategic support
The initial announcement by the Prime Minister, Michel Barnier, to raise the DMTO from 4.5% to 5% caused an outcry in the real estate sector. Notaries, agents and buyers denounced a measure deemed contrary to purchasing power. For a property estimated at 300,000 euros, the increase would be equivalent to 1,500 euros in additional costs according to JDD figures, a significant sum for many households already involved in a mortgage loan.
The government seems to have heard these criticisms by excluding first-time buyers from this increase. This category, which still represented 55% of borrowers in 2023is now in the minority, victim of increasing borrowing rates and inflation. The desire to spare them this tax reflects an urgent need to revitalize a market at half mast, with a drop in real estate transactions of almost 25% in three years.
New housing, the other priority
New housing is also exempt from this increase in notary fees. The sector is going through a historic crisis with a 10% drop in building permits in one year and an explosion in construction costs linked to the rise in materials and new environmental standards.
This exclusion of new goods aims to limit the damage for a sector which has already lost more than 30,000 jobs according to the French Building Federation. Although this measure is welcomed by promoters, it remains insufficient to stem the crisis which is hitting the entire sector.
The former penalized, criticisms pending
On the other hand, buyers of old properties, whether second-time buyers or investors, will not be spared from the increase in transfer taxes. A decision presented as temporary and valid for three years, but which worries real estate professionals. Many fear a dissuasive effect on transactionsalready in clear decline.
The legal feasibility of this differentiation also raises questions. According to the principle of fiscal equalityit could be difficult to justify different taxation depending on the profile of buyers. The departments, which will have the final say on the application of this increase, will also have to arbitrate between their financial needs and the risk of voter discontent in the run-up to the 2028 elections.
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