The acquisition costs, improperly called “French notaire's fees”, are added to the purchase price of the real property. Generally, they are settled by the purchaser but not received by the seller or the Notary for their greater share.
Why do we speak of “French notaire's fees”?
The acquisition costs of a real estate are essentially composed of taxes paid to the State. Yet, they are often called “French notaire's fees”.
This error of language is easily explained. Indeed, although these costs are not intended to them (at least for their greater share), French notaires have the responsibility of collecting them on behalf of the State. French notaires are then required to remit these costs to the Public Treasury.
What are the costs of buying a property?
Property acquisition costs include the remuneration of the notary, disbursements and transfer rights. Most of the costs are transfer taxes (or registration fees).
The cost of buying real estate is around 7-8% of the purchase price of buying an old property, while it is around 2 to 3% for new properties. The amount of the costs depends on the nature of the property, the sale of the furniture and the location of the property.
The acquisition costs include levies and taxes (called Registration fees)
They relate to the acquisition of the property and are paid to the Public Treasury (Trésor Public).
They are transferred to the State or the local communities, as the case may be. Calculated according to the value of the property, their amounts vary depending on said property’s geographic location. Transfer taxes are made up of municipal tax, the departmental tax, as well as the tax collected for the State.
Concerning transfers against payment of buildings contemplated by Article 683 of the General Tax Code (Code général des impôts or CGI), Article 77 of the Finance Law 2013-1278 (Loi n°2013-1278 de finances), the year 2014 has allowed the Departmental Councils, on a transitional basis, to raise the rate of the Land Registration tax or of the registration fees contemplated by Article 1594 of the CGI, above 3.80% and within the limit of 4.50% for past acts and agreements concluded between 01/03/2014 and 29/02/2016. This possibility has been perpetuated by Article 116 of the Finance Law n° 2014-1654 for 2015.
To this day, only the departments of Indre, Isère, Morbihan and Mayotte have not used this possibility.
The acquisition costs include the costs and disbursements
These are the sums paid by the French notaire on behalf of his client.
These costs and disbursements are used to remunerate the different stakeholders in charge of producing the documents necessary for the change of ownership (Registrar of Mortgages, registration of mortgage guarantees, costs of sale’s publication, town planning document, extract from the Land Register, land surveyor expert, trustee, etc.). Some exceptional costs incurred at the request of the client, such as travel expenses, should also be taken into account.
The acquisition costs include the remuneration of the French notaire
The remuneration of the French notaire is called emoluments.
New mechanisms have been implemented by the Decree of the 26th of February 2016 on tariffs of certain professions of law, as well as by the Decree of the 26th of February 2016 establishing the regulated tariffs of Notaries.
The consequence is that in parallel to the increase of the registration fees described above, the tariff of Notaries sees a decrease of its rates: 1.33% for immovable properties’ acts of sale (Article A444-91 of the Code of Commerce), 1.45% for the acts of loan, etc.
The over-the-counter sale or assignment (number 54 of Table 5) gives rise to a proportional emolument, according to the following scale:
|BASE BRACKETS||APPLICABLE RATE|
|From €0 to €6,500||3.945%|
|From €6,550 to €17,000||1.627%|
|From €17,000 to €60,000||1.085%|
|More than €60,000||0.814%|
Example for a sale at €200,000:
|BASE BRACKETS||APPLICABLE RATE||PROPORTIONAL EMOLUMENTS|
|From €0 to €6,500||3.945%||6,500 X 3,945%= €256.43|
From €6,550 to €17,000
|1.627%||(17,000 - 6,500) X 1.627% = €170.84|
|From €17,000 to €60,000||1,085%||(60,000 – 17,000) X 1.085% = €466.55|
|More than €60,000||0.814%||(200,000 – 60,000) X 0.814% = €1,139.60|
TOTAL OF PROPORTIONAL EMOLUMENTS = €2,033.41
Comment: Those are brackets so the calculation is done successively, bracket by bracket.
Note 1: “The sum of the emoluments received by the notaire for the performance relating to the transfer of property or a property legislation may not exceed 10% of the value of said property or legislation” but cannot be below a threshold of €90.00. (Article R444-9 of the Code of Commerce in its regulatory section). This threshold essentially concerns the real estate transactions of low amounts, such as lands or properties located in rural areas, or common portions, cellars and parking spaces in urban environments. Obviously, this threshold does not concern taxes generated by the operation.
Calculate your real estate purchase costs
The remuneration of the French notaire may be subject to rebate
A rebate of 10% maximum, strictly controlled by Article A444-174 of the Code of Commerce created by Article 2 of the Decree of the 26th of February 2016, can be decided by the French notaires for the base brackets above €150,000.00
In some cases (offices, industrial units, social housing, “Dutreil” agreements, etc.), this rebate is set to a maximum of 40% applicable to the part of emoluments calculated on the base brackets of 10 million euros or greater.
The rebate rates by category of acts and base brackets will be guaranteed to all clients of the office and will be displayed on the spot.
Example for a sale of €200,000.00:
The maximum discount of 10% will be:
(200,000 – 150,000) x 0.814% = €407.00
That is to say = €40.70