With effect from 1 April 2025, the 2025 Finance Act authorises départements to temporarily increase by 0.5 percentage points the département tax on transfer duties for valuable property (DMTO), more commonly known as "notary fees". This increase, which is optional, could nevertheless be adopted by the majority of départements due to the reduction in local budgets. Initially set at 4.5%, the rate of this tax could rise to 5% until 30 April 2028.
Why this increase in "notaire's fees"?
Faced with a significant drop in their tax revenues, due in particular to the gradual abolition of the taxe d'habitation (council tax) and the slowdown in the property market, the départements are justifying this increase by the need to compensate for a shortfall estimated at more than €2 billion. By 2023, revenues from DMTO had already fallen by 21.9% to €11.4 billion. This tax increase is expected to generate between €450 million and €700 million in additional revenue.
Who will be affected?
All buyers of property, whether houses, flats, land or business premises, will be affected by this increase, with the following exceptions:
- First-time buyers, defined as households buying their principal residence for the first time, who must not have owned their principal residence for the previous two years and must be committed to living in it for five years.
- Buyers of new properties.
What impact will this have on property transactions?
The additional 0.5% adopted by certain départements will have a direct impact on buyers, representing an additional cost of around €500 per €100,000. For example, the purchase of a property costing €250,000 will entail an additional expense of €1,250, while a property costing €400,000 will entail an additional cost of €2,000, and a property costing €600,000, an increase of €3,000.
Application and implementation
The implementation of this measure will depend on the decisions of each département. Some, such as Paris, Côte-d'Or and Val-de-Marne, have already announced that they will apply the increase from 1 April 2025. Others may choose to adopt the measure at a later date, depending on their budgetary needs and the date on which the local authorities decide to do so.
A temporary increase
Although the increase in 'notaire's fees' is announced as temporary, with a planned end date of 30 April 2028, tax history shows that many taxes introduced temporarily end up being made permanent. This was the case with the Contribution pour le Remboursement de la Dette Sociale (CRDS), introduced in 1996 for a period of 13 years and still in force today. It is therefore not out of the question that this increase in DMTO will be extended beyond 2028, depending on the budgetary needs of local authorities.
Conclusion
The increase in notary fees in 2025 represents a new obstacle for property buyers, although its impact will vary from one département to another and according to the profile of the buyer. While this measure is intended to support local finances, it could also slow the momentum of the property market. It remains to be seen how the départements and players in the sector will adapt to this new situation.
