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. The great majority of departments have voted accordingly. 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 subject to VAT taxed at the reduced rate of 0.70%, i.e. 0.715% including assessment costs (CGI art. 1594 F quinquies): not affected
— 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 5.80% 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. The great majority of departments, including Paris, have voted for the maximum rate, with effective dates that vary according to the timetable of the deliberations and their notification.

Two categories of transactions escape the increase: first-time buyers acquiring their main residence, expressly protected by the legislation, and transfers subject to VAT (new housing in particular), which remain taxed at the reduced rate of 0.70% provided for by Article 1594 F quinquies of the French Tax Code (i.e. 0.715% including assessment costs) and are therefore not affected.

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
  • Scheme limited in time: the increased rates cease, in principle, to apply to deeds executed after 31 March 2028
  • Verification, matter by matter, of the rate in force in the department at the date of the deed
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): not having been the owner of one's main residence during the two years preceding the acquisition
  • The property must be intended as the buyer's main residence, an allocation declared in practice in the deed
  • 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
  • Failure to comply with the main-residence allocation exposes the buyer to the clawback of the benefit
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; checking the administrative guidance as at the date of the deed remains advisable
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%), municipal tax of 1.20%, 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 subject to VAT 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. The great majority of departments, including Paris, have adopted the 5% rate, with effective dates that vary according to the timetable of the deliberations and their notification. The applicable rate is the one in force at the date of the deed in the department where the property is located: the verification must be carried out case by case 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. Beyond that date, the standard ceiling of 4.50% set by Article 1594 D of the French Tax Code is intended to apply again, subject to a possible extension by a subsequent finance act.

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 purchaser who has not been the owner of their main residence during the two years preceding the acquisition. 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.

Are new-build homes affected by the increase?

No, in principle. Sales subject to VAT, in particular sales of new buildings and 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 of the French Tax Code, i.e. 0.715% including assessment costs. This rate is not affected by the increase under Article 1594 D. 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 (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 (Article 1594-0 G of the French Tax Code) are exempt, subject to a fixed duty. 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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François Ouairy, avocat associé

Written by

Me François Ouairy, avocat associé en charge du bureau de Paris, expert en fiscalité immobilière, fiducie et fiscalité financière.

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