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Advice
The acquisition costs, often mistakenly referred to as "notary fees," are added to the purchase price of real estate properties and are mainly composed of taxes paid to the state. They are generally paid by the buyer but, for the most part, do not go to the seller or the notary.
What do real estate purchase costs include?
Real estate acquisition costs include the notary's fee, disbursements, and transfer taxes. The transfer taxes (or registration duties) constitute the largest part of the costs. Real estate purchase costs represent around 7 to 8% of the purchase price for older properties, while they are about 2 to 3% for new properties. The amount of the costs depends on the nature of the property, the sale of furniture, and the property's location.
Real estate purchase costs include taxes and duties (called registration duties).
These are related to the acquisition of the property and are paid to the public treasury. They go, depending on the case, to the state or local authorities. Calculated based on the value of the property, their amounts vary depending on the geographical location. Transfer taxes consist of the municipal tax, the departmental tax, and the tax collected for the state. Regarding transfers for consideration of real estate under Article 683 of the General Tax Code (CGI), Article 77 of Law No. 2013-1278 of the 2014 Finance Act allowed, temporarily, departmental councils to raise the public land tax or registration duties under Article 1594 D of the CGI beyond 3.80%, up to a limit of 4.50% for deeds executed and agreements concluded between 1/03/2014 and 29/02/2016. This provision was made permanent by Article 116 of Law No. 2014-1654 of the 2015 Finance Act. As of today, only Indre, Isère, Morbihan, Martinique, and Mayotte have not used this provision.
Acquisition costs include fees and disbursements.
These are the amounts paid by the notary on behalf of the client. These fees and disbursements are used to pay various parties responsible for producing the necessary documents for the transfer of property (land registry office, registration of mortgage guarantees, sale publication fees, urban planning documents, cadastral extract, surveyor, property manager, etc.). Exceptional costs incurred at the client's request, such as travel expenses, should also be considered.