Transfer duties, acquisition costs

2025 DMTO increase: what changes for notary fees

Article 116 of Law No. 2025-127 of 14 February 2025 (the 2025 Finance Act) allows the French departments, on a temporary basis, to raise the rate of the departmental registration duty and land registration tax above the 4.50% ceiling set by Article 1594 D of the French Tax Code, up to a limit of 5%, an increase of up to 0.5 percentage point. As at 1 June 2026, according to the table published by the DGFiP, 89 departments and local authorities, including Paris, apply the 5% rate. The increase does not apply to first-time buyers acquiring their main residence, including, under the ministerial answer published in September 2025, the first-time buyer's share in the case of a joint purchase in undivided co-ownership. On a 400,000 euro purchase of an existing property, the additional cost is approximately 2,000 euros. The firm advises buyers, sellers and investors on calibrating the tax treatment of their acquisitions.

Calibrate the tax treatment of your acquisition See the real-estate VAT practice
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— In brief
Measure
Optional increase in the departmental DMTO rate, from 4.50% to a maximum of 5% (2025 Finance Act, art. 116)
Scale
Up to 0.5 percentage point of additional duties on the purchase price
Duration
Temporary scheme: deeds executed, in principle, between 1 April 2025 and 31 March 2028
First-time buyers
The increased rate does not apply to the acquisition of a main residence by a first-time buyer
Out of scope
Sales of building land and new buildings subject to VAT on the full price, taxed at the reduced rate of 0.70%, i.e. 0.715% including assessment costs (CGI art. 1594 F quinquies, A): not affected. Sales subject to VAT on the margin or by election remain at the increased rate
After 2028
For deeds executed from 1 April 2028, automatic return to the rate in force on 31 January 2025 (2025 Finance Act, art. 116, IV)
— 01

Half a point more on purchases of existing property

What practice calls "notary fees" consists essentially of taxes: the departmental registration duty or land registration tax (Article 1594 D of the French Tax Code), the additional municipal tax and the levy for assessment and collection costs. Before the reform, the departmental rate was set by most departments at the ceiling of 4.50%, bringing the overall burden to approximately 5.81% of the price for the purchase of an existing property.

Article 116 of the 2025 Finance Act gives departmental councils the option of raising this rate up to 5%, on a temporary basis. The measure responds to the contraction in departmental DMTO revenue following the slowdown in the property market. As at 1 June 2026, according to the table published by the DGFiP, 89 departments and local authorities, including Paris and the whole of the Île-de-France region, apply the 5% rate. Eleven remain at 4.50%: Hautes-Alpes, Alpes-Maritimes, Ardèche, Charente, Drôme, Lozère, Oise, Hautes-Pyrénées, Saône-et-Loire, Guadeloupe and Mayotte; Indre retains 3.80%. The table is updated monthly on impots.gouv.fr. The timetable is set by paragraph III of Article 116, supplemented by Article 121 of the 2026 Finance Act: a deliberation notified no later than 15 April 2025, or between 1 December 2025 and 15 April 2026, or between 1 December 2026 and 15 April 2027, applies to deeds executed from the first day of the second month following its notification; a deliberation notified between 16 April and 30 November of a given year applies from 1 January of the following year.

Two categories of transactions escape the increase: first-time buyers acquiring their main residence, expressly protected by the legislation, and sales of building land and new buildings subject to VAT on the full price, which remain taxed at the reduced rate of 0.70% provided for by Article 1594 F quinquies, A of the French Tax Code (i.e. 0.715% including assessment costs), which the increase does not alter. By contrast, sales subject to VAT on the margin (Article 268 of the French Tax Code) and sales of existing buildings subject to VAT by election remain at the standard rate, and therefore at the increased rate.

Since the 2025 Finance Act, three texts have supplemented the scheme without altering either the 5% ceiling or the end date of 31 March 2028: Decree No. 2025-946 of 8 September 2025, which sets out the cases in which the commitment provided for by Article 1594 F septies is not required; Article 121 of Law No. 2026-103 of 19 February 2026 (the 2026 Finance Act), which opens a new window for the notification of deliberations, from 1 December 2026 to 15 April 2027; and BOI-ENR-DMTOI-10-20 of 17 June 2026, which incorporates the Berger ministerial answer.

The firm takes on a limited number of engagements in order to guarantee the direct involvement of the partners on each matter, and systematically assesses whether its involvement is warranted before accepting any engagement.

— 02

The scheme, point by point

01

The mechanism: a temporary departmental option

The increase is neither automatic nor uniform: it requires a deliberation of the departmental council.

  • Increase in the rate under Article 1594 D of the French Tax Code above 4.50%, up to a limit of 5%
  • Application to deeds executed and agreements concluded from the effective date of the deliberation, at the earliest 1 April 2025
  • Timetable set by paragraph III of Article 116, supplemented by Article 121 of the 2026 Finance Act: a deliberation notified no later than 15 April 2025, or between 1 December 2025 and 15 April 2026, or between 1 December 2026 and 15 April 2027, applies from the first day of the second month following its notification; a deliberation notified between 16 April and 30 November of a given year applies from 1 January of the following year
  • Scheme limited in time: for deeds executed and agreements concluded from 1 April 2028, the rate automatically reverts to the rate in force on 31 January 2025 (art. 116, IV), unless extended by a subsequent finance act
  • Verification, matter by matter, of the rate in force in the department at the date of the deed or of the agreement effecting the transfer; a preliminary sale agreement concluded before the effective date of the deliberation may, if it amounts to a completed sale, lock in the previous rate, which warrants case-by-case verification
02

The exemption for first-time buyers

The increased rate does not apply to first-time buyers acquiring their main residence.

  • First-time buyer status is assessed by reference to the zero-interest loan regime (I of Article L. 31-10-3 of the French Construction and Housing Code): a natural person who has not been the owner of their main residence, nor the holder of the real rights over it under a solidarity real lease (bail réel solidaire), during the two years preceding the acquisition; the condition is not required of the disabled persons referred to in the legislation, nor of the victims of a disaster that has rendered their main residence permanently uninhabitable
  • The property must be intended as the buyer's main residence, understood as their habitual and effective residence (BOI-ENR-DMTOI-10-20, 17 June 2026)
  • Article 116 also creates Article 1594 F septies of the French Tax Code: an option for departments to reduce the rate or grant an exemption to first-time buyers, subject to a commitment to use the property as a main residence for at least five years; Decree No. 2025-946 of 8 September 2025 sets out the cases in which the commitment is not required (job relocation, death, divorce, long-term unemployment, disability, force majeure). As at 1 June 2026, only Savoie has used this option, with a 4% rate for first-time buyers
  • Two regimes not to be confused: for the optional reduction or exemption under Article 1594 F septies, the five-year commitment is sanctioned by the recovery of the duties; for the statutory exclusion from the increase (art. 116, II, B), the legislation only requires that the property be intended as the main residence, assessed by reference to actual occupation
03

Joint purchases: only one buyer is a first-time buyer

A frequent situation for couples where only one member has previously been a property owner.

  • Under the Berger ministerial answer (No. 5129, JOAN 16 September 2025), first-time buyer status is assessed buyer by buyer for co-owners in undivided ownership and spouses married under a separation-of-property regime
  • Protection against the increased rate then benefits the share acquired by the first-time buyer; the other buyer's share bears the increased rate
  • For spouses married under a community-of-property regime (community reduced to acquests or universal community), both spouses must in principle satisfy the condition, unless one spouse acquires the property as separate property (reinvestment of separate funds and double declaration in the deed)
  • The matrimonial property regime and the allocation of rights in the deed have a direct impact on the amount of duties payable; the administrative guidance (BOI-ENR-DMTOI-10-20, 17 June 2026) has adopted this solution
04

The quantified impact on acquisition costs

The additional cost is simple to measure: approximately half a point of the price, including assessment costs.

  • DMTO on existing property: departmental duty (4.50% or 5%), additional tax of 1.20% levied for the benefit of the municipality or, for unclassified municipalities with fewer than 5,000 inhabitants, of the departmental equalisation fund (unless reduced or waived locally), assessment costs of 2.37% of the departmental duty
  • Purchase of 400,000 euros: approximately 2,000 euros of additional duties at the 5% rate
  • Purchase of 1,000,000 euros: additional cost of approximately 5,100 euros, including assessment costs
  • A useful comparison with the preferential regimes: commitment to resell or to build (property dealers, developers), sales of building land and new buildings subject to VAT on the full price at the 0.715% rate
— 03

Our approach

The firm advises on the taxation of real-estate acquisitions at every stage: determining the applicable transfer regime (standard DMTO, reduced rates, commitments to resell or to build, sales subject to VAT), securing first-time buyer status and the drafting of the deed in the case of a joint purchase, comparative costing of acquisition scenarios and defence in the event of a challenge. The analysis is coordinated with real-estate VAT and the regimes specific to real-estate professionals.

  • DMTO
  • Notary fees
  • 2025 Finance Act
  • First-time buyers
  • CGI art. 1594 D
— FAQ

2025 DMTO increase: your questions

By how much do notary fees increase in 2025?

By approximately 0.5 percentage point of the purchase price in the departments that have voted for the maximum rate. Article 116 of Law No. 2025-127 of 14 February 2025 allows the departmental rate under Article 1594 D of the French Tax Code to be raised from 4.50% to a maximum of 5%. Taking into account the municipal tax of 1.20% and the assessment costs of 2.37% of the departmental duty, the overall DMTO burden rises from approximately 5.81% to approximately 6.32% of the price for the purchase of an existing property, i.e. approximately 2,000 euros more for a 400,000 euro property.

Does the increase apply in every department?

No. The increase is an option open to each departmental council, which must vote a deliberation to that effect. As at 1 June 2026, according to the table published by the DGFiP, 89 departments and local authorities, including Paris and the whole of the Île-de-France region, apply the 5% rate. Eleven remain at 4.50%: Hautes-Alpes, Alpes-Maritimes, Ardèche, Charente, Drôme, Lozère, Oise, Hautes-Pyrénées, Saône-et-Loire, Guadeloupe and Mayotte; Indre retains 3.80%. The table is updated monthly on impots.gouv.fr. The timetable is set by paragraph III of Article 116, supplemented by Article 121 of the 2026 Finance Act: a deliberation notified no later than 15 April 2025, or between 1 December 2025 and 15 April 2026, or between 1 December 2026 and 15 April 2027, applies to deeds executed from the first day of the second month following its notification; a deliberation notified between 16 April and 30 November of a given year applies from 1 January of the following year. The applicable rate is the one in force at the date of the deed or of the agreement effecting the transfer in the department where the property is located; a preliminary sale agreement concluded before the effective date of the deliberation may, if it amounts to a completed sale, lock in the previous rate, which warrants case-by-case verification before signing.

Until when can the 5% rate apply?

The scheme under Article 116 of the 2025 Finance Act is temporary: it covers, in principle, deeds executed and agreements concluded between 1 April 2025 and 31 March 2028. For deeds executed and agreements concluded from 1 April 2028, the applicable rate in the departments that have raised their rate automatically reverts to the rate in force on 31 January 2025 (4.50% in almost every case), pursuant to paragraph IV of Article 116, unless extended by a subsequent finance act. The 2026 Finance Act (Article 121) did not extend the scheme: it merely opened a new window for the notification of deliberations, from 1 December 2026 to 15 April 2027.

Who qualifies as a first-time buyer under this scheme?

The legislation refers to the definition used for the zero-interest loan (I of Article L. 31-10-3 of the French Construction and Housing Code): a first-time buyer is a natural person who has not been the owner of their main residence, nor the holder of the real rights over it under a solidarity real lease (bail réel solidaire), during the two years preceding the acquisition. The condition is not required of the disabled persons referred to in the legislation, nor of the victims of a disaster that has rendered their main residence permanently uninhabitable. The protection also requires that the property acquired be used as the buyer's main residence. A rental investment or a secondary residence does not qualify for the scheme, even for a first-time buyer.

What happens if only one of the two buyers is a first-time buyer?

Under the Berger ministerial answer (question No. 5129, JOAN of 16 September 2025), the condition is assessed individually, buyer by buyer for unmarried partners, civil partners (PACS) and spouses married under a separation-of-property regime: the share acquired by the first-time buyer escapes the increased rate, while the share of the buyer who is not a first-time buyer bears it. By contrast, for spouses married under a community-of-property regime, both spouses must in principle be first-time buyers, unless one of them acquires the property as separate property (reinvestment of separate funds with a double declaration in the deed). The allocation of rights adopted in the deed therefore has a direct impact on the duties payable. The administrative guidance (BOI-ENR-DMTOI-10-20, 17 June 2026) has adopted this solution.

Are new-build homes affected by the increase?

No, in principle. Sales of building land and new buildings subject to VAT on the full price, in particular off-plan sales (VEFA), are taxed under the land registration tax at the reduced rate of 0.70% provided for by Article 1594 F quinquies, A of the French Tax Code, i.e. 0.715% including assessment costs. This rate is not affected by the increase under Article 1594 D. By contrast, sales subject to VAT on the margin (Article 268 of the French Tax Code) and sales of existing buildings subject to VAT by election remain at the standard rate, and therefore at the increased rate. This is one of the reasons why the gap in acquisition costs between new and existing property is widening in 2025.

Do real-estate professionals bear the increase?

Not necessarily. Property dealers who give a commitment to resell within five years (Article 1115 of the French Tax Code) pay the land registration tax at the reduced rate of 0.70% (0.715% including assessment costs), and acquisitions made under a commitment to build within four years (Article 1594-0 G of the French Tax Code) are exempt, subject to a fixed duty of 125 euros (Article 691 bis of the French Tax Code). These regimes are not modified by Article 116. Compliance with the commitments and time limits nevertheless remains a condition for keeping these preferential regimes.

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