acquisition costs, buying French property, French property, French property acquisition costs, French property notaire fees, mortgage notaire fees, notaire, notaire fees, second home in France, stamp duty, what is a notaire?
warning (update from January 2015): the French stamp duty has increased from 5.09% to 5.80% in most of the French “départements” except in the following: Indre (36), Isère (38), Loire-Atlantique (44), Mayenne (53), Morbihan (56), Paris (75), Yvelines (78), Martinique (972), Guyane (973), Mayotte (976); and the VAT on French notaires fees from 19.6% to 20% since the 1st of January 2014. See our post “where the French stamp duty has increased from 5.09% to 5.80%, latest update at January 2015“
In one of our previous blog “French stamp duty to rise soon…” we explained the amounts of stamps duty (5.09% which may increase to 5.79% from the 1/01/2014) and in another blog “reduced stamp duty on French property: in which case?” the very specific cases when you can benefit from a “reduced” stamp duty at 0.715%.
Overall the acquisition costs amount to 6-7% of the property value including the “notaire” fees and expenses. Acquisitions costs are refered as “frais de notaires” in plain French. This wording is used as the notaire is in charge of collecting all the acquisition costs including the stamp duty on behalf of the French “department” and the town hall. While notaire fees in French are “honoraires du notaire” which can be a little bit confusing!
So let’s examine the “notaire” fees & expenses and other minor fee…
A “notaire” is a legal official with public authority which is under the authority of the Ministry of Justice, his mission is to write and draw authenticated contracts. More especially, he is in charge of writing the acquisitions contract (“acte authentique” in plain French) between the buyer and seller of any property sold in France and he is the only person who has the legal right to do so. A few months before signing the “acte authentique”, you generally sign a preliminary contract (the “compromis de vente” or “promesse de vente”, we will come back to these concepts in a separate post), it is not compulsory that the “notaire” writes and draws the preliminary contract, however it is often the case and it should be the preferred option. Each party, buyer and seller, may choose a separate notaire and it is generally better to do so. In this case there is no additional notaire fees as the fees will be shared between both. (more information on the official website of the notaires : www.notaires.fr, some page are translated into English)
The “notaire” fees are regulated by a state decree and are split into one part calculated as a % of the acquisition price of the property and another part as a fix amount:
|property price||notaire fees|
|up to 6 500 Euros||4%|
|from 6 501 to 17 000 Euros||1.65%||152.75|
|from 17 001 to 60 000 Euros||1.10%||246.25|
|above 60 000 euros||0.83%||411.25|
A 19.6% VAT is added to the above fees.
You will also have to refund the notaire for various incurred spending for an approximate amount of 1000 euros (“émoluments de formalités et frais divers” or “débours” in French).
Finally there is an additional contribution due to the French state of 0.10% of the property acquisition price (“contribution de sécurité immobiliere”) for officially registering the authentic acquisition deed.
1/ Calculation of acquisition costs (“frais de notaire”) for a built property as an example a studio acquired 95 000 euros at Saint-Gervais Mont Blanc
stamp duty : 95 000 * 5.09% = 4 835 euros
notaire fees : (0.83% * 95 000 + 411.25)* 1.196 = 1435 euros
refund to the notaire of various spending: 1 000 euros
additional contribution for registering the deed : 95 000 * 0.10% = 95 euros
Total acquisition costs : 7 365 euros or 7.75% of the acquisition price, 8 030 or 8.45% if the stamp duty increases to 5.79%
If the studio is acquired “off plan” (as specified in our blog “reduced stamp duty on French property….”), than the “reduced” stamp duty 0f 0.715% is applied leading to a total cost of 3 209 euros or 3.38% of the acquisition price.
2/ For a beautiful built chalet acquired for 600 000 euros located at Hauteluce (Alps, Savoie), the overall acquisition costs would be 38 588 euros or 6.43% of the acquisition price, 42 788 or 7.12% for a stamp duty at 5.79%. So it is wise to factor it in advance in your budget.
Finally, if you intend to contract a mortgage, and the property acquired represents the guarantee for the bank, than the mortgage contract will have to be written by the “notaire” (it is also compulsory) and you will need to factor the notaire fees for this contract. If the bank’s guarantee is in the form of a traditional mortgage “hypothèque traditionnelle”, you will have to pay an additional 0.715% of stamp duty on 120% of the mortgage loan amount. However, if the bank’s guarantee is a “privilege de preteurs de deniers” (ppd) stamp duty is exempted, so try to go for a ppd (we will explain these concepts in a later post). There is also the contribution for officially registering the authentic mortgage deed (0.05% * 102% of the mortgage).
notaire fees for a mortgage contract are based on a % of the mortgage and a fix amount:
|up to 6 500 Euros||1.33%|
|from 6 501 to 17 000 Euros||0.55%||50.7|
|from 17 001 to 60 000 Euros||0.37%||81.3|
|above 60 000 euros||0.275%||138.3|
there is also a 19.6% VAT on top…
…to which you might have to add additional refunds of various spending to the notaire (generally up to 500 euros)
example: your “traditional” mortgage amount to 100 000 euros
notaire fees : (0.275%*100 000 + 138.3) *1.196 = 494 euros
refund of spending to the notaire: 500 euros
stamp duty 0.715 * 120% *100 000 = 858 euros
contribution 0.05 % * 120% *100 000 = 60 euros
total of 1 912 euros or 1.9% of the mortgage.
If the guarantee is a ppd, total of 1054 euros, or 1.1% of the mortgage.
There is another type of guarantee, the caution (“caution” in French), that may be financially interesting in some circumstances. We will come back to this point.