Non contractual offer, this is for informative purposes
Non contractual offer, this is for informative purposes
Notary fees, what you need to know
What are notary fees?
We hear about notary fees in many situations and they are very often misunderstood by real estate buyers.
We wrongly call them "notary fees". This abuse of language creates an insinuation that we are paying a sum of money when we buy a property that will go directly into the pocket of our notary. This is not true.
In reality, these fees are called "acquisition fees, transfer fees or deed fees". They are the sole responsibility of the purchaser and consist mainly of state taxes on the acquisition of a property, money that will therefore be collected by the public treasury, and a small part of these fees will be paid to the notary (s). The notaries are therefore tax collectors for the State.
If you talk about transfer fees and not about "notary fees", you can be sure that your notary will sincerely love you for having informed about what these fees applied to each real estate transaction really are and for knowing that they are not a direct remuneration that would arrive on the notary's current account.
Unfortunately, for a better understanding of the public, we will use the term "notary fees" on this page. We therefore apologize to all notaries in France.
Why do I have to pay notary fees?
It is necessary to pay notary fees for the simple reason that it is the law. Notary fees are mandatory because they involve the valid and legal aspect of any real estate sale and therefore allow the transfer of property from a seller to a buyer without future disputes, this applies to new real estate (built or unbuilt for the purchase of land) and old, for a house as for an apartment.
How much are the notary fees?
The notary fees are fixed by law. Therefore, they are fixed (with a slight variation of rates by department, as well as a very small variation that can reside between two communes). Globally, it is necessary to count between 7% and 8% of the price of the property in additional notary fees for a real estate acquisition of a property in the old whereas for a real estate purchase in the new, it will be necessary to count between 2% and 3% of the price of the property in notary fees. These values are not expected to change.
Even if a municipal or departmental vote can be requested to increase the rate of notary fees, it should be noted that they have a significant impact on the fragility of the real estate market, in some departments more than others, depending on the existing tension in the local market and the average cost per m2 of a property. Thus, the majority refuses to vote for increases in the communal and departmental taxes within the notary fees, because an increase in the rate, even minimal, could affect the number of real estate projects in the future.
How are the notary fees broken down?
The notary fees include:
Registration fees: Registration fees represent the merger of taxes of different scales (municipal and departmental) and amount to an average of 5% of the price of the property. It is the tax that represents the action of registration of this transaction by a public official. It is also the heaviest component of the notary's fees.
Sale publication fees: The notary must, after the transaction, publish the real estate sale at the Service de la Publicité Foncière so that it is officially recognized. These publication fees represent a very small part of the notary's fees.
Disbursements: Disbursements represent the sum of all the ancillary costs (printing, file creation, land registry, etc.) generated by a real estate transaction involving a transfer of property. Disbursements represent a small part of the notary's fees.
Notary's emoluments: The notary's emoluments represent both what the notary's office collects with the sale, but also the formalities that the notary advances for the purchaser while waiting for the final payment of the notary's fees at the time of the authentic act. These formalities represent only a very small part of the notary fees.
VAT: You surely know what VAT is, whether it is included in the notary fees or not.
When do I have to pay the notary fees?
The notary fees are almost never taken in charge by the bank. As previously mentioned, these are mainly made up of taxes, the bank does not wish to pay the fixed costs which are not directly part of the real estate investment product for which you will borrow. These notary fees are to be paid using your contribution by check or bank transfer at the time of the signature of the deed of sale, the act that officially transfers the ownership of a property from one person to another.
Does notarial plurality increase notary fees?
The notary fees are calculated on the basis of the price of the property sold. Regardless of the number of notaries involved in the transaction, the notary fees applied will remain the same. The distribution of the emoluments will be distributed among the different notary offices involved in the real estate sale.
Is it possible to reduce notary fees?
As the notary fees are fixed by law, it is theoretically not possible to reduce them. Nevertheless, there is a way to reduce the notary fees in certain particular cases, or rather a way to reduce the purely real estate part of your acquisition which is the only basis for the calculation of the notary fees (deed fees or transfer fees).
To reduce the notary's fees, it is therefore necessary to play on the acquisition price, the latter is always quoted in FAI, thus including the real estate agent's commission. When the commission is payable by the seller, the price includes this commission (which is not disclosed in terms of percentage) in the selling price of the property in order to remunerate the real estate agent. It is therefore not possible to reduce the purchase price by the agency commission charged to the seller.
Nevertheless, when these fees are charged to the buyer, the percentage is fixed and disclosed, which allows to separate it from the price of the property FAI, and thus to pass this commission as a commission of search mandate, which allows the selling price to be significantly lower than the commission of the real estate agency, and it will be the same for the notary fees.
( The acquisition fees apply only to the real estate value, and not to the furniture. If you decide to add value to the furniture (kitchen cupboards, a sofa, a bed, etc.), you will extract this value from the price of the property and thus reduce the purely real estate value of this property in the transaction, thus reducing the notary fees. But to do this, you need the direct agreement of the seller beforehand, and this requires time and an additional inventory of fixtures with a series of estimates that sellers are happy to do without. It is not rare that the seller refuses this proposal. )
Practical example of notary fees, the simulation
Let's take the example of a buyer, we'll call him Barnabé. Barnabé wants to buy a Parisian apartment worth €200,000 FAI (Agency fees included), assuming that the real estate agency fees are to be paid by the seller and therefore indivisible from the FAI price of the property.
Barnabé is buying a property in the department 75 and here is the total of the notary fees that he will have to pay: €15,800, i.e. 7.9% of the price of the property.
Barnabé will therefore have to pay €2,795 of emoluments, which represents 17.7% of the "notary fees". These emoluments are made up of the income of the notary's office up to €1,995 (i.e. 12.63% of the notary's fees, and 0.99% of the price of the property) and the estimated value of the "formalities" here of €800 (i.e. 5.1% of the notary's fees) which represents all the obligatory administrative steps which the notary takes care of before and after the signature of the authentic act. Barnabé will pay to the State (via Registration Fees and VAT) the total sum of €12,372 (i.e. 78.5% of the notary fees and 6.19% of the price of the property).
The rest of the notary's fees to be paid consist of the publication in the national real estate file of a value of €200 as well as the disbursements (the notary's additional fees such as the constitution of the file, the land registry, the mortgage statements, etc.) up to €600.
In the end, Barnabé only gave the notary's office €1,995, which is still not what will end up in the pocket of his poor notary. But Barnabé will be able to say that the new crosswalk in front of the bakery is for him!