Real Estate: Transfer Taxes on the Rise

Transfer taxes (DMTO), commonly referred to as notary fees, represent a significant cost when purchasing real estate. Currently, these taxes average 4.5% of the property’s purchase price, but can reach 4.7% in certain departments.
 

Under the 2025 Finance Act, departments will be able to increase these fees by an additional 0.5 percentage points, bringing them up to 5 percent. This increase, effective March 1, 2025, is intended to offset the reduction in state grants to local governments.
In practical terms, for a property purchased for €300,000, this increase would represent an additional cost of €1,500 for the buyer. A €500,000 investment would entail an additional cost of €2,500.
 

In light of this increase, first-time homebuyers could be eligible for specific tax exemptions, provided they keep the property as their primary residence for at least five years. This measure is left to the discretion of local governments, which will have to decide whether or not to apply this tax relief.
 

This increase has drawn criticism:
• It further drives up the cost of purchasing a home, at a time when the real estate market is already grappling with high interest rates.
• It could slow down transactions, particularly in areas where demand is already declining.
• It penalizes buyers with modest incomes, who must draw on more of their savings to cover these additional costs.
 

However, some experts believe that the impact will remain limited, since transfer taxes account for only a portion of the ancillary costs associated with purchasing real estate. Furthermore, this increase is optional and will depend on the decisions of individual departments.