What are notary fees?
Sale: What are notary fees?
The notary fees in France refer to what you pay the notary for rendering their services in the real estate process. The notary is a public servant that guides either or both parties (owner and seller) throughout the real estate process. They offer legal counsel, certify legal documents, and handle other things like taxes, registrations, and more.
Notary fees or “acquisition costs” are non-negotiable. In a real estate sale, it is generally necessary to count between 7% to 8% of the price of the property in fees. Upon signing the final deed of sale, the notary will retain this amount from the final price paid in the sale. However, the notary fees that they get to keep only account for 1% of the total costs. The rest is reserved for taxes relating to an update of the real estate file of the Land Registration Service or goes to the municipality, the department, or the State. The most important tax goes to the department, but the actual amount remains depends on the departments. All departments in France increased taxation from 3.8% to 4.5% in 2014, except Mayotte, Isère, Morbihan, and Indre.
Reduced costs in an investment in the new
When acquiring new property, notary fees are reduced by half compared to the acquisition of old real estate. For example, purchasing an old property accounts for around 7% to 8% of the final sale price, as compared to purchasing a new property, which will only be around 2% to 3%. This is mostly because of the mortgage tax that exists within older real estate.
Nevertheless, it's also worth noting that newer properties tend to be more expensive, especially the price per square meter (m²). Hence the 2% to 3% in notary fees for new properties may still equal or even surpass 7% to 8% in notary fees for older real estate. In the Paris region in particular, specifically throughout the inner suburbs, the supply of new properties is extremely low or even limited. This is why notary fees can potentially be offered in order to compensate for a lower price despite the fact that they are still more expensive than the old real estate.
Pay more with several notaries?
There is no legal regulation that requires a choice of notary in particular for a real estate acquisition. As a general rule, the buyer decides which notary is responsible for drafting the final deed of sale. However, the seller can still request that their notary be present on the day of signing.
In the event that several notaries are combined for both parties, no costs are added and notarial fees will be legally regulated.Their remuneration is increased by 10% of notary fees, regardless of the number of notaries present. The fee will be 1% of the price, divided thereafter according to the number of notaries present.
Nevertheless, it will still be recommended to have 2 different notaries—one for the buyer and one for the buyer—to ensure both parties that their opinions and best interests will be taken into account.
Reduce notary fees?
Despite the fact that notary fees are mainly composed of taxes going to the State and local authorities, some “tricks” exist in order to reduce them. The taxes are irreducible but the basis for payment of these taxes is.
For one thing, you can reduce what's included in the property for sale. Furniture sold with real estate is included in the price, such as an equipped kitchen or bathroom furniture. Therefore, you're required to mention them in the list of furniture equipment without exceeding 5% of the price in order to avoid the risk of tax control. With 5% of furniture gone, you'll only have to pay the costs of 95% of the selling price. You can now deduct them from the final which will then lessen the notary fees.
Moreover, it's also possible to deduct agency fees from notary fees in certain special situations.
- Notary fees or “acquisition costs” are non-negotiable.
- Generally, notary fees account for around 7% to 8% of the final price of the property.
- They're mostly composed of taxes and payments for the notary.
- Only 1% of the notary fees are actually paid to the notary.
- The fees vary according to the departments.
- Notary fees for newer properties are commonly lower compared to those for old properties.
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Posted on 21/10/2021 by
Andy LECUYER
