Notary fees are the costs associated with the purchase or sale of a property. These fees are due to the notary for carrying out the administrative and legal formalities necessary to finalize the real estate transaction. They mainly include the notary’s fees (services and advice, drafting of the compromise and the notarial deed, etc.), taxes paid to the State (land registration tax, departmental and municipal taxes) and disbursements (costs related to the sale paid on behalf of the client). As an indication, it is often considered that notary fees vary between 7% and 10% of the sale price of the property.
What are the notary fees ?
Notary fees, in accordance with Decree No. 2016-230 of February 26, 2016, as well as the Order of October 28, 2016, are composed of several elements:
– emoluments and fees ;
– disbursements;
– duties and taxes.
The fees correspond to the amount collected by a notary for any service whose rate is not regulated. This concerns in particular legal consultations or the sale of businesses. The remuneration of these services is freely established between the notary and the client.
The emoluments are also part of the notary’s remuneration, but their tariff is regulated. Depending on the service, the fees can be fixed or proportional. The first case concerns the formalities that the notary carries out before and after the signature of a deed. The second case includes rather the drafting which is then proportional to the value of the good concerned by the act. The calculation is based on a rate applicable to the base brackets. Thus, regardless of the content of the file or the location of the notary’s office in charge of the case, his remuneration will be the same for all clients.
The disbursements include all the costs advanced by the notary during the real estate transaction, before and after the signing of the deed of sale. The notary remunerates, on behalf of the client, the various parties involved as well as the creation of certain documents and passes on these costs in the acquisition fees.
The rights and taxes correspond to all the sums paid to the State, the tax authorities as well as to the local authorities. They are called transfer duties and the real estate security contribution. They represent the major part of the acquisition costs.
How to calculate the notary fees ?
To calculate the notary’s fees, you have to take into account each part that makes them up:
The notary’s fee is calculated according to a sliding scale proportional to the price of the property:
– From 0 € to 6500 € : 3,945 % ;
– From 6500 € to 17 000 € : 1,627 % ;
– From €17,000 to €60,000: 1.085%;
– Above €60,000: 0.814%.
Please note that the number of notaries who will act on the file does not change the amount of the acquisition fees. If there are two notaries, they will share the services and therefore the fees.
The disbursements represent the additional expenses. They are calculated following the signing of the deed of sale. These expenses will be deducted in the following months. Moreover, it is not uncommon for the buyer to receive a balance of this amount, in the event that the costs have been overestimated.
The transfer duties are calculated according to the location of the property, as well as its condition, new or old. They correspond to 5.8% of the sale price, except for the departments with reduced rates (Indre, Morbihan, Mayotte) where they are 5.09%. These fees only apply if the property is old. A purchase in new real estate exempts you from this tax since the property has never been registered. The real estate security contribution represents 0.1% of the sale price, with a minimum of 15 €.
Who pays the notary fees?
In most cases, the buyer is responsible for paying the notary fees. He must pay them on the day of the signing of the deed of sale, at the same time as the payment of the sale.
However, it is possible that the buyer and the seller agree that the seller will pay the notary fees. In reality, the seller will often pass on the notary’s fees in the sale price. This is called “acte en main”. In this case, the choice of the debtor must be mentioned in the unilateral or synallagmatic promise of sale.
Notary fees in old and new buildings
Notary fees vary according to the condition of the property, i.e. whether it is new or old. Indeed, the acquisition costs are twice as high for an old property purchase as for a new one. We generally speak of 2 to 3% of the sale price for new properties and 7 to 8% for old properties.
This difference can be explained by the absence of transfer duties and municipal tax when buying a new property. Only the departmental tax remains to be paid, with a rate of 0.71%.
Is it possible to negotiate the notary fees ?
The notary fees are composed of different elements: emoluments, disbursements and taxes. The disbursements and taxes are in no way negotiable since they concern the transfer duties due to the tax authorities, the real estate security contribution due to the State as well as the payment of external service providers. Only the emoluments received by the notary are negotiable, provided that the question is dealt with before committing to the real estate transaction with the notary. Since the Macron law, if the sale price exceeds 150 000 €, a notary can reduce his remuneration by a maximum of 10%.
How to reduce the notary fees ?
There are several solutions to reduce notary fees:
– Negotiate the emoluments: even if they represent only a tiny part of the acquisition costs, it is nevertheless possible to consult several notaries in order to find the one who will accept to negotiate his fees.
– Deducting the value of furniture: when buying a property, it may contain furniture (kitchen, bathroom, etc.) that can be deducted from the notary’s fees. You only need to evaluate their value (invoices, estimate, etc.) in order to determine the amount, which must not exceed 5% of the selling price.
– Deduct the amount of the agency fees: if you went through a real estate agency to buy your property, you will undoubtedly have agency fees to pay. You can therefore deduct them from the purchase price. The notary will base his calculation on the net selling price.
– Buying a new property: the notary fees for a new property purchase are half as high as for an old property.
When to pay the notary fees ?
During a real estate transaction, both parties meet in the office of a notary to conclude the sale. On this occasion, the buyer pays the amount of the sale, depending on the payment planned (bank loan or not) or the remaining amount to be paid if he/she has already made an advance payment. The buyer must also pay the notary fees charged by the notary public for the payment of his fees, disbursements and taxes.
Sometimes the notary may overestimate the acquisition costs. In this case, a balance will be paid to the buyer in the months following the signing of the deed of sale.