Notary fees: their increase will torpedo your real estate purchase plans, proof by the figures

The 0.5 point increase in property transfer taxes, announced by the Prime Minister, worries real estate professionals, who fear seeing the fragile market recovery nipped in the bud. They are not wrong.

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Regular drop in credit rates since the start of the year, parallel reduction in sales prices… This fall, all the ingredients seemed to come together to finally allow households to realize their real estate purchase plansput on hold due to the quadrupling of credit rates between the beginning of 2022 and the beginning of 2024. Alas! Faced with local authorities facing headwinds against the effort of 5 billion euros that the government is asking of them in the finance bill for 2025, the Prime Minister announced, on November 15, that the departments which wish to do so will be able to increase transfer taxes for valuable consideration by 0.5 points in 2025 (DMTO), commonly and incorrectly called “notary fees”. These famous fees that you must pay when purchasing real estate and which represent no less than 7% to 8% of the sale price in old properties, and 2% to 3% in new properties.

This increase in transfer taxes, which will, for example, increase your “notary fees” by 1,000 euros for a purchase of 200,000 euros, “risks compromising the timid recovery (of the real estate market) observed following the drop in interest rates”worries Loïc Cantin, president of the National Real Estate Federation. Until now, Fnaim was counting on an 8 to 10% drop in the number of transactions in old real estate in 2024, thanks to the timid improvement of recent months. But that was before Michel Barnier’s announcement of an increase in DMTO.

The increase in DMTO, a significant obstacle to household mobility

To what extent could this slow down the resumption of real estate purchases? An INSEE study on the latest increase in DMTO gives an idea. Included in the initial finance law for 2014, this 0.7 point increase in “notary fees” initially caused a 26% jump in transactions in February 2014one month before its entry into force. “An anticipation effect (on the part of households) to avoid the increase in DMTO”analyzed INSEE at the time.

But the number of transactions then collapsed, to the point that, even corrected for the anticipation effect of February, the number of real estate transactions fell by 6% per month in April, May and June 2014. “The increase in DMTO has a significant negative impact, in the short termon household mobilityconcluded INSEE. An impact which had then reduced by… 42% the gain in DMTO revenue hoped for by the departments for these three months from April to June 2014. It would be difficult to do anything more counterproductive.