One of the proposals of the majority regarding housing in the legislative elections is to eliminate notary fees for first-time buyers when they buy housing for less than 250,000 euros. If the gain in purchasing power for buyers can reach 15,000 euros, this measure will cost 3 billion euros a year.
“For middle-class French people who want to access property for the first time, we will exempt notary fees if they buy a house up to 250,000 euros.” Gabriel Attal, Prime Minister, formulated this proposal for the presidential camp to revive real estate and attract first-time buyers. The amount of 250,000 euros here refers to the value of the property (and not the notary fees).
In a press conference entitled “The next day”, the Renaissance candidate for the legislative elections points out that “it is a gain in purchasing power of 15,000 euros for middle classes.
Technically, if we refer to the simulator from the National Agency for Housing Information (Anil), this amount seems to correspond only to fees and taxes (and therefore rather to 14,500 euros) and not to all notaries. For a purchase of 250,000 euros in an old property in Paris for example, the “notary fees” (which include taxes and notary fees) in fact represent 19,000 euros and are divided as follows:
- Taxes and fees: 14,516 euros
- Taxes included for the notary: 2,873 euros
- Fees for formalities and disbursements: 1,360 euros
- Property security contribution: 250 euros
But how much will this cost the State? The Montaigne Institute has quantified some proposals for “purchasing power” from the various parties. And according to his calculation, this measure on “notary fees” represents a cost between 3 and 4.7 billion euros per year. The institute uses an average scenario of 3.3 billion euros. To arrive at this figure, the Montaigne Institute started with an effective tax rate for onerous transfer tax (DMTO) of 5.81% of the purchase price (maximum rate applied in most the cases) for the former.
A “feasible” measure.
The cost of the measure is estimated from the application of this fee to transactions carried out by buyers for the first time, from an estimated total of 622,000 transactions that are under the ceiling of 250,000 euros. “A low assumption is made on the proportion of first-time buyers (64%, corresponding to their share in all transactions, all amounts combined), a high assumption (fixed at 100%), and a central to 75%, which reflects the higher proportion of buyers for the first time for goods of lower price than for all cases, “specifies the Institute.
He also analyzed the feasibility of such a measure. Regarding the constitutional feasibility, I believe that this measure will pass through a legislative route in the financial laws that the constitutional censorship is limited. He also points out that there will be no block at European level. And that this “measure seems relatively consensual, particularly in the right and center blocs”. And he adds: “Such a measure could therefore not be carried by the presidential majority without an absolute majority or a majority coalition on this subject in the National Assembly.”
As a reminder, what we call in the common language “notary fees” include notary fees, but also taxes, transfer rights for a valuable consideration (DMTO), which finance the State and the communities. The DMTOs represent 16.8 billion euros in tax revenue in 2022, according to the 2022 housing account report published last September.