In 2026, transfer duties on sales for consideration (droits de mutation à titre onéreux, DMTO) come to 6.32% of the price of an existing building in most French départements, under the increase in the departmental duty applicable to deeds executed and agreements entered into from 1 April 2025 to 31 March 2028 — often the single largest friction cost of a real-estate transaction. For VAT-taxable persons, the French Tax Code offers two regimes that change the economics of an acquisition: the undertaking to resell (land registration tax at 0.715%) and the commitment to build (a fixed duty of €125). This page brings the whole file together: both undertakings, the flexibility they allow and the disputes they generate.
The sale of an existing building bears transfer duties at an all-in rate of 6.32% in most départements, as a result of the increase in the departmental duty voted in the 2025 Finance Act and applicable until 31 March 2028. Eleven départements stayed at the 4.50% rate, giving 5.81% all in (Hautes-Alpes, Alpes-Maritimes, Ardèche, Charente, Drôme, Lozère, Oise, Hautes-Pyrénées, Saône-et-Loire, Guadeloupe, Mayotte), and the Indre stayed at 3.80%, giving 5.09% (DGFiP table of rates as at 1 June 2026). Offices, commercial premises and storage premises located in the Île-de-France region additionally bear a 0.6% surtax (French Tax Code, art. 1599 sexies), except where the sale is subject to VAT and falls under the 0.715% rate.
The sale of a new building (completed less than five years ago) bears only the land registration tax, at 0.715%, where it is subject to VAT on the full price (French Tax Code, art. 1594 F quinquies, A); resold by a private individual, or sold under the margin-VAT regime, the same building bears the ordinary duties. Large-scale works (structural works, façades other than mere refacing, the addition of storeys, renovation of at least two thirds of each of the six categories of finishing works) can make an existing property new for tax purposes.
For VAT-taxable persons, these rates are not a foregone conclusion: two undertakings given in the deed of acquisition bring the charge down to 0.715%, or even to a mere fixed duty. That is where the real economics of a buy-to-sell or development transaction are decided.
Land registration tax at 0.715% in exchange for a resale within 5 years (French Tax Code art. 1115) — the property dealer's everyday tool:
A fixed duty of €125 in exchange for producing a new building within 4 years (French Tax Code art. 1594-0 G, A):
The choice is made in the deed, but it is not irreversible:
Before signing, compare the three scenarios:
The life of an undertaking does not stop at the deed: periods run short, projects evolve, the tax authorities challenge. The full file, page by page.
The one-year renewable application: form, one-month period, tacit acceptance after two months. Read the page.
No extension is provided for by article 1115, save for buildings in a development zone (zone d'aménagement concerté, ZAC) acquired by the developer of the zone (French Tax Code art. 1594-0 G, A, IV bis). Before the deadline, only the substitution of a commitment to build opens a fresh period. Read the page.
Unit-by-unit resales of an apartment block and the tenant's pre-emption right: how the two-year period is computed, lot by lot. Read the analysis.
Intra-group resales, challenges to taxable-person status, abuse of law on the undertaking to resell, undisclosed property-dealing activity: the most frequent grounds for a tax audit.
The firm acts across the whole life cycle of transfer duties: pre-acquisition structuring — choice of undertaking, characterisation of taxable-person status, interaction with real-estate VAT —, drafting of the clauses alongside the notary, monitoring of the periods, substitutions and assumptions, and defence in tax audits and litigation where the authorities call the regime into question.
This practice draws on a sustained real-estate VAT workload — the two subjects answer each other at every stage of a transaction — and on regular publications in the practitioners' journals (Defrénois, Lextenso).
The firm is recognised for its real-estate VAT and taxation practice (highly regarded by Leaders League, listed in Best Lawyers 2026 for tax law).
6.32% for an existing building in most départements, 5.81% in the eleven départements that stayed at 4.50% and 5.09% in the Indre (DGFiP table as at 1 June 2026), and 0.715% for a new building sold subject to VAT on the full price (French Tax Code, art. 1594 F quinquies, A). The increase in the departmental rate to 5%, from which the 6.32% all-in rate derives, applies only to deeds executed and agreements entered into between 1 April 2025 and 31 March 2028; the 5.81% rate of the eleven départements that stayed at 4.50% is not affected by that end date; for deeds executed from 1 April 2028 the rate reverts to the one in force on 31 January 2025 (loi n° 2025-127 of 14 February 2025, art. 116, IV). The increase to 5% does not apply where the property acquired constitutes, for the purchaser, a first property within the meaning of I of article L. 31-10-3 of the French Construction and Housing Code and is intended to be used as the purchaser's principal residence (same article, II, B): the acquisition then remains taxed at the ordinary departmental rate (5.81% in most départements). For offices, commercial premises and storage premises located in the Île-de-France region, a 0.6% surtax is added (French Tax Code, art. 1599 sexies), except for sales falling under the 0.715% rate.
Two regimes, reserved for VAT-taxable persons: the undertaking to resell (land registration tax at 0.715%, resale within 5 years) and the commitment to build (fixed duty of €125, new building within 4 years). The choice has to be costed transaction by transaction.
Yes. Large-scale works (structural works, façades other than mere refacing, the addition of storeys, renovation of at least two thirds of each of the six categories of finishing works) can make the building new for tax purposes (French Tax Code, art. 257, I, 2, 2°), with consequences both for transfer duties and for VAT. The analysis is carried out on the basis of quotations and measured works.
The duties initially exempted become payable together with late-payment interest, to be paid within the month following the deadline (French Tax Code, art. 1840 G ter). Before the deadline, three ways out exist: substitution of the other undertaking, extension (granted on application for the commitment to build, with tacit acceptance absent a reasoned refusal within two months; non-existent for the undertaking to resell, outside the ZAC case) and assumption by a sub-purchaser who is itself a taxable person.
The four components of the fees, and the calculator comparing the three acquisition scenarios.
Voir la page Latest developmentsThe departmental duty raised to 5%, the départements that stayed at 4.50%, and the March 2028 deadline.
Voir la page CharacterisationWhen works tip a property into the new-building category, for VAT as well as for transfer duties.
Voir la page VATTransfer duties and VAT answer each other at every stage: the complete file on VAT in real-estate transactions.
Voir la pageThe firm advises property dealers, developers and real-estate companies across the whole cycle: undertakings, substitutions, litigation.
The information on this page is provided for documentary purposes and does not constitute legal or tax advice. State of the law: July 2026 — transfer duties at the rate resulting from the 2025 Finance Act, applicable until 31 March 2028 in the départements that voted the increase.
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