Will notary fees increase?

The government could consider increasing notary fees to partially absorb the impact of the real estate market crisis on community revenue.

Transfer taxes: definition

When purchasing real estate, buyers must pay notary fees or “transfer taxes for valuable consideration” (DMTO). The latter represent a percentage of the transaction amount and include the notary's remuneration, as well as taxes collected for the municipality, the department and the State. DMTO generally represent 2 to 3% of the sale price for a new home and 7 to 8% of the sale price for an old home.

The community budget

Since the gradual abolition of the housing tax, transfer taxes constitute one of the primary sources of financing for communities – according to Capital.fr, they represent between 15% and 20% of the departments' total revenue. A campaign promise by candidate Emmanuel Macron in 2017, the gradual abolition of the housing tax resulted in a shortfall of nearly 20 billion euros for communities. This tax was levied by the municipalities and despite the State's promise, it was never fully compensated. In addition, the abolition of the housing tax led to an almost general increase in property taxes in the area.

The impact of the real estate market crisis

According to François Sauvadet, president of the Departments of France interviewed by BFMTV on November 5, the general decline in the real estate market would have deprived the departments of nearly 6 billion euros in annual revenue. A sum which, added to the “5 billion euros effort” requested from communities by the government for the 2025 budget, makes one cringe. Questioned the same day, the Minister of Housing Valérie Létard did not close the door to the departments' proposal to increase transfer taxes, recalling however that this measure could solve one problem while creating another.

An impact on the purchasing power of buyers

Indeed, an increase in notary fees would have the effect of increasing the sale prices of goods and therefore reducing the purchasing power of buyers. In other words, an increase in transfer taxes could disrupt the market recovery. The Minister of Housing intends to focus on relaunching the production of new housing to revitalize the market and the number of real estate transactions. Catherine Vautrin, Minister for Partnership with the Territories, assures that the government remains “perfectly open on the increase in the DMTO rate”.