Who pays what?
You’re planning to purchase or build a home. You’ve checked all the figures and you’re wondering what kind of financing you can afford. But don’t forget the added costs you must bear!
In virtually every case, the selling price for houses, flats or land targeted for development excludes the acquisition costs. This means that the buyer pays all expenses relating to the sale.
These expenses, commonly referred to as “notaire’s fees”, are added to the purchase price, but for the most part they’re paid neither to the seller nor to the notaire. So what happens to these famous fees? The answer is simple: they’re primarily paid as tax. The notaire is responsible for collecting them on behalf of the French government. Taxes aren’t limited just to what you earn (income tax, social security contributions, etc.) and what you own (property taxes, wealth tax, automobile registration). The tax bureau also assesses a tax on real estate when it changes hands.
For example, when you purchase a property worth €75,000, the acquisition costs you must pay over and above the price of the property amount to about €5,700. Taxes and disbursements (fees relating to zoning documents, the mortgage registry, the cadastral agency, etc.) account for most of these costs. There are numerous miscellaneous taxes. Some are calculated as a percentage of the transaction, while others are fixed amounts. The most significant is the land registry tax, also known as the tax on transfers without consideration. In our example, this represents about €3,700. In addition, there is the stamp tax assessed on each page of both the original notarial deed and the certified copy (the purchaser’s certificate of title), calculated at €6 per two-sided page in standard format. Deeds these days are often lengthy and the stamp tax can run into the hundreds of euros. To this is added VAT (19.60% on the notaire’s compensation) and the mortgage registry fees (0.10% on the price of the transaction).
Before committing to a property transaction, don’t hesitate to contact your notaire. Ask him or her to estimate the additional costs you’ll have to bear. You can also have the notaire calculate any other expenses you should plan for – if you’re applying for a loan from your bank, for example. Notaires provide a public service and are compensated at a set rate established by the Ministry of Justice and applicable throughout France. Only your notaire can provide you with precise information and detailed explanations.