Understanding transfer duties: a guide for property buyers

What are transfer duties?

Transfer duties are taxes levied by the State and local authorities when there is a change in ownership of a property. They comprise several components:

• The departmental tax: the main component of transfer duties, its rate varies from department to department, but is generally between 3.8% and 4.5% of the purchase price.
  
• Communal tax: an additional percentage set by the commune.
  
• Assessment and collection fees: levied by the State to cover administrative costs.
  

These fees are added to other charges such as notary fees and disbursements, which is why they are grouped together under the general term “notary fees”.

What are they used for?

Transfer duties finance local authorities, in particular départements and communes, as well as the State. These funds are used to support public infrastructure, social services and regional planning. In other words, they contribute to local development.

Although they play an essential role in the running of local authorities, their amount can be a brake on real estate mobility, particularly for first-time buyers or those planning frequent transactions.

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How much do transfer duties cost?

The amount of transfer duties varies according to several criteria:

1. Property price: calculated as a percentage of the purchase price.
   
2. Location: departmental and municipal rates vary according to zone.
   
3. Type of property: new-build properties benefit from a special system of reduced transfer duties.
   

For an old property, transfer duties are generally around 7% to 8% of the purchase price. For new-build properties, the rate is much lower, often around 2% to 3%.

A concrete example

For an old property sold for €500,000, transfer duties can amount to around €35,000. On the other hand, for a new property at the same price, it would be around €10,000.

Who pays the transfer duties?

Transfer duties are always payable by the buyer. However, they are calculated and collected by the notary, who then pays them to local authorities and the State.

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How can you anticipate and reduce them?

Anticipating transfer taxes

When preparing a real estate project, it's crucial to factor transfer taxes into the overall budget. To do this

• Use online simulators to calculate notary fees.
  
• Consult your notary for a precise estimate.
  
• Allow an extra margin in your financing plan.
  

Special schemes

There are a number of schemes that allow you to reduce transfer duties: these measures have been introduced to facilitate access to property ownership and encourage certain specific transactions. They are also designed to lighten the financial burden on buyers in particular situations, such as new-build purchases or transfers between relatives.

• Buying new: costs are much lower than for older homes.
  
• Sales between close relations: in certain cases, rates can be reduced.
  

Advice for first-time buyers

For those buying their first property, don't hesitate to ask your notaire or a real estate professional for advice on exploring all the options available.

Recent changes in transfer duties

In recent years, the government and some local authorities have been considering changes to transfer dutiesto encourage real estate mobility. Among the avenues explored :

• Lower rates in certain regions.
  
• Temporary exemptions for young buyers.
  
• Simplification of tax scales.
  

However, these measures remain ad hoc and vary from year to year. For example, in 2023, some regions temporarily reduced transfer duties for first-time buyers to stimulate the local property market. The year 2025 looks less pleasant for buyers, with the risk of local authorities increasing transfer duties to compensate for budget losses. So it's essential to stay informed.

Conclusion

Transfer taxes are an inescapable part of the cost of buying real estate. Although they may seem onerous, anticipating them well will help you avoid surprises and prepare your project with peace of mind. Calling on the services of an apartment hunter can be a major asset in this process: his or her expertise not only enables you to target properties that match your expectations, but also to help you anticipate ancillary costs and strategies for optimizing your budget. By surrounding yourself with competent professionals, you maximize your chances of making an informed purchase that's tailored to your needs.