How to Lower Notary Fees When Buying Real Estate?

Are you currently considering a real estate buyback project? You must have heard about the notary fees. What is it concretely? Is it an obligation? How to calculate them and above all, is there a way to lower them? Find the answer to these in this article!

What exactly are the notary fees?

In the legal world, we talk a lot about DTMO (Transfer Rights to Onerous Title). Since they are generally paid to the notary, they are commonly referred to as notary fees. DTMOs are tax burdens imposed by the state in the sale of any real estate.

They are shared between the State, the municipality and the department of the place where the property in question is located. The notary’s fees are generally only 1/5 of all these costs.

How to calculate the notary fees?

The taxation of new goods alternates between 2 and 3% of the purchase price while that of old ones varies from 7 to 8%. For more details, you can visit the website of the notaries of France. A calculation tool is available there to guide you step by step.

You can also contact a notary to help you estimate the costs. This will not cost you a round since notaries are only paid for the deed and not for the opening of a file.

How to negotiate to lower the notary fees?

To reduce the notary fees, you have two options: pay the agency fees separately and / or deduct the cost of the furniture from the sale.

Pay the agency fees separately

The law states that agency fees should be calculated on the value of the property and not on the related services that helped find the property. The trick, therefore, is to exclude the estate agent’s fees from the sale price and pay them independently of the sale. However, this technique depends on the mandate of the sale.

So, if in the sales mandate published in the advertisement, it is stipulated that the agency fees are the responsibility of the buyer, then you have the possibility of reducing your notary fees. Otherwise, the agency fees are charged to the seller. They are therefore deemed not to be part of the overall cost of the purchase.

That said, you will need to ensure that the sales mandate states that the agency fees are charged to your assets. To do this, ask the real estate agent about the sales mandate. In the case of a sales mandate (therefore agency fees payable by the seller), you can request the rewriting of the mandate so that the costs are charged to you.

It then becomes a search warrant. Subsequently it will suffice to clearly establish the distinction between the cost of purchasing the property and the fees to be paid to the real estate agency. The only downside to this strategy is that you must have cash on you to pay the agency directly as soon as the purchase is validated by the notary.

For an estimate of the possible gains with this method, let’s take an example where the sale is supposed to cost 400,000 euros. Agency fees should be around 30,000 euros. The costs saved at the notary would reach around 1,800 euros.

Deduct the cost of furniture

This is the second possibility that it can be more attractive in terms of economy. The notary’s fees are calculated on the value of the property while the purchase is fixed on the basis of the value of the property, but also of the furniture that composes it. If the asset is therefore transferred with the furniture, you will have to assess the value of all the furniture separately (fitted kitchen, bathroom, sink, mattress, etc.).

To do this, you will base yourself on the purchase invoices and the duration of their use. A depreciation coefficient can therefore be established to redefine the value of each piece of furniture. Once this is done, you will have to mention on the sales agreement, a clear distinction between the cost of the sale of the property and that of the furniture. The notary will then calculate his costs based solely on the costs of purchasing the property.

This technique is more popular with buyers. Only, it is advisable not to make a high estimate of the value of the furniture. Generally, when it exceeds 5% of the value of the property, it arouses the attention of the tax authorities. They will carry out their investigations and if it is established that you have made an overestimation, you will undergo a tax adjustment with penalty.

Notary fees, can we really avoid them?

You may be wondering how to reduce these fees, even a little more, know that you will not be able to remove all of them, for example, it will be difficult to see the taxes go down. On the other hand, you can play on the emolument part of the notary, which corresponds to his fees.

They still have a small margin, but beware, since the Macron law, in 2016, their rate has fallen, however they are authorized to grant a maximum discount of 10% in the event that the sale exceeds € 150,000. Namely, that this rate will be applied only from 150 000 € it will not concern the lower part.

Here are the new scales applied since the Macron law entered into force on 1er May 2016:

  • From 0 to 6,500 €, the old rate is 4%, it rose to 3.945%
  • From € 6,500 to € 17,000, the old rate is 1.65%, it rose to 1.627%
  • From 17,000 to 60,000 €, the old rate is 1.10%, it rose to 1.085%
  • Above € 60,000, the old rate is 0.825%, it rose to 0.814%

You are already a winner since the Macron law, but do not hesitate to try a negotiation, to profit more from a reduction from 150 000 € of sale.

Why are notary fees necessary?

Any transfer of real estate ownership must, to be valid, be published at the mortgage registry. This is only possible through a notary. Also, the legal role of the notary is to draft the contracts, to authenticate them and to keep them to assert them in the event of a dispute. It is therefore an operation which aims to protect the interests of the buyer and ensure him a legal title of new owner of the property.

Share on facebook
Share on whatsapp
Share on skype
Share on twitter
Scroll to Top