A variety of fees (also called closing or completion costs) are payable when you buy a property in France. These vary considerably according to the price and age of the property, whether you’re buying through an agent (as opposed to buying direct from the vendor), whether you’ve employed a lawyer and surveyor and whether you have a French or foreign mortgage.
They can amount to over 40% of the purchase price of a new property and over 25% for a property over five years old. Most property fees are based on the ‘declared’ value of the property, which may be less than the purchase price or its ‘market’ value.
You should never be tempted to under-declare the price in order to pay lower fees as it can have serious consequences if it’s discovered.
The fees associated with buying a property in France are listed below, although not all will apply to all sales. (Stamp duty was abolished in 2006.) Fees are payable on the completion of a sale if not before. Before signing a preliminary contract, check exactly what fees are payable and how much they are, and have them confirmed in writing.
The notaire handling the sale collects all the fees associated with a purchase (except a selling agent’s commission and sundry fees). These are confusingly referred to as the frais de notaire, although only around 10% of them are made by the notaire himself for his services; these are known as émoluments et honoraires. Notaires’ fees are calculated as a percentage of the purchase price on the sliding scale shown below, which is fixed by the government. Note, however, that these are the maximum fees they can charge; they can be (and usually are!) considerably more than the actual amount due (allegedly in case of unforeseen expenses) and you can wait up to six months to receive a reimbursement of the amount overpaid.
Portion of Purchase Price - Rate
This means that the notaire’s fees for a property costing €200,000, for example, would be €2,033.41 to which VAT must be added (see below). In addition, a notaire will normally charge you around €250 for preparing a preliminary contract. Note that British solicitors have challenged the notaires’ monopoly on conveyancing in France and, should government regulation be abolished, fees will inevitably come down significantly.
Registration taxes (taxes de publicité foncière/TPF) vary according to whether you’re buying a new or an ‘old’ (i.e. over five years old) property. On an old property registration taxes (known in this case as droits de mutation) total 4.89%, which comprises 3.6% departmental tax (taxe départmentale), which is itself subject to 2.5% frais de recouvrement making an effective tax of 3.69%, and 1.2% communal tax (taxe communale or taxe additionnelle). The same rates apply to building plots and commercial property. On a property less than five years old that’s being sold for the first time, TPF is at just 0.6% of the price excluding VAT, which must also be paid (see below).
Expenses associated with land registration (droits d’enregistrement) depend on the size of the mortgage and the number of searches made by the notary in order to draft the deed of sale but usually total around 0.6% of the property’s value.
Mortgage arrangement fees may amount to around 1% of the purchase price. There’s also a fee payable to the notaire for registration of the mortgage at the bureau des hypothèques, which has recently been reduced by around 15%t but is still between around 1 and 1.8% of the mortgage amount depending on the type of mortgage.
Value added tax (VAT) at 19.6% must be paid on properties less than five years old when they’re sold for the first time. If you sell a new property within five years, you must pay VAT on any profit (plus capital gains tax). Since 1998, there has been no VAT on building plots purchased by individuals. Note also that most of the other fees associated with buying property, including notaires’ fees, are subject to VAT at 19.6%.
Where the selling agent is an estate agent (agent immobilier), his fee is normally calculated as a commission on the selling price, which can be as high as 10% but is more usually between 3 and 8%, the higher rates normally applying to luxury properties. Advertised selling prices usually include the agent’s fee; this is indicated by the terms commission compris or frais d’agence inclus. The words net vendeur indicate that the agent’s fee isn’t included. Before signing a contract, check who must pay the estate agent’s fee and what it will be. When the selling ‘agent’ is a notaire, his fee is generally lower than that of an estate agent and it’s always paid by the buyer. Where no agent is used, i.e. in a direct sale, no fee is payable, which should mean that the purchase price is the relevant percentage lower than those of comparable properties being offered by estate agents and notaires.
Other fees may include the following:
The following example of fees is based on a property costing €100,000 purchased with a €50,000 mortgage. A new home is one less than five years old sold for the first time; an old home is one more than five years old or one less than five years old sold for the second (or subsequent) time
Fees: New Home - Old Home
TOTAL: New Home up to €40,515 - Old Home Up to €26,045
In addition to the fees associated with buying a property you must take into account running costs. These include local property taxes, building and contents insurance, standing and consumption charges for utilities, community fees for a community property, maintenance costs (e.g. garden and pool), plus a caretaker’s or management fees if you leave a home empty or let it. Annual running costs usually average around 2 to 3% of the cost of a property.