Transfer tax (DMTO)
Taxes collected by the département and municipality upon the sale of an existing property, making up the largest component of notary fees in the old-property market (approximately 5.8% in most départements). In new-build sales (completed less than 5 years ago), they are replaced by real-estate VAT and reduced registration duties, explaining the lower acquisition costs in new-build transactions (2–3%).
Key points
- Apply to sales of existing properties; approximately 5.8% in most départements.
- In new-build sales (under 5 years old, first sale), replaced by VAT and reduced duties of around 2–3%.
- Calculated on the net seller price, excluding buyer-borne agency fees.
- Certain first-time buyers or rural-zone purchases may qualify for specific reductions.
Frequently asked questions
Why are notary fees higher for existing properties than for new builds?
In existing-property sales, transfer taxes (départemental tax + municipal tax + surcharge) amount to roughly 5.8% of the price and represent most of the acquisition costs. In new builds, 20% VAT is already included in the listed sale price; only reduced registration duties (around 0.7%) apply, giving overall acquisition costs of 2–3%.
How do transfer taxes affect the financing plan?
Transfer taxes are part of the acquisition costs that the main mortgage cannot usually finance (except in rental investment or certain structures). They must be covered by the personal contribution, which is why banks often require a minimum 10% deposit: roughly 5.8% in DMTO plus notarial fees typically accounts for 7–8% of the purchase price.
Do all départements apply the same transfer tax rate?
No. The départemental tax can vary slightly: nearly all départements have opted for the maximum rate (currently 4.5%), but a few have chosen a lower rate. Add the municipal tax (1.2%) and the collection charge (0.1%), giving a total of approximately 5.8% in most cases. The broker checks the exact rate for the relevant département when calculating acquisition costs.
In practice
On the purchase of an existing apartment at €300,000 in Lyon (Rhône, full rate), transfer taxes amount to roughly €17,400, to which the notary's fees (around €3,000) and disbursements are added: the buyer should budget approximately €22,000 in total acquisition costs.
Official sources
- Computing acquisition costs (notary fees) · Service-Public.gouv.fr
- Housing and financing information · ANIL
- Mortgage credit (official guide) · Service-Public.gouv.fr