You dream of becoming a homeowner, but the notary fees are holding you back? Good news: you can negotiate these fees and save hundreds, even thousands of euros. How? Here are 5 tips you need to know to reduce the bill.
1. Understand the composition of notary fees
Before starting to negotiate the notary fees, it’s important to understand what they actually cover. Contrary to popular belief, the majority of these fees do not go directly into the notary’s pocket.
In fact, nearly 80% of these fees are transfer taxes that are paid directly to the state and local authorities. The notary’s fees, which is the notary’s compensation, only account for about 10% of the total.
The remaining 10% covers additional costs and disbursements. These are administrative fees, legal formalities (such as land registry documents or mortgages), as well as fees paid to external professionals (surveyors, experts, etc.). Like taxes, these costs are fixed.
Knowing the exact breakdown of these fees will help you better target negotiable items and maximize your savings.
2. Negotiate the notary’s fees
While the majority of notary fees are non-negotiable, there is a small margin you can leverage: the notary’s fees, which account for 10% of the total.
Since the Macron Law of 2016, notaries are allowed to offer a discount of up to 10% on their fees for real estate transactions over €150,000. If your property valuation exceeds this amount, it’s an opportunity to take advantage of!
Tip: Don’t hesitate to consult several notaries. Some are more open to negotiation than others, and it’s always good to compare.
Moreover, if you have other upcoming projects (wealth management, donations, etc.), mention it. This could encourage the notary to offer a commercial gesture in hopes of a long-term collaboration.
3. Reduce fees by deducting furniture value
You also have the option of deducting the value of the furniture included in the property to reduce the notary fees. These fees only apply to the property’s real estate value, not the furniture or equipment that comes with it. By specifying in the agreement the value of the furniture separate from the sale price, you reduce the taxable base.
In practice, just estimate the value of the furniture (such as fitted kitchens, appliances, etc.) and subtract it from the overall price. For example, if you buy a property for €200,000 with €10,000 worth of furniture, the notary fees will then be calculated on €190,000. This can save you several hundred euros!
Good to know: This deduction is generally capped at 5% of the property price, and banks won’t finance the furniture portion. So, you’ll need to plan for this amount in cash.
4. Negotiate real estate agency fees
Another way to reduce your notary fees is to separate the real estate agency fees from the sale price. If these fees are included in the total price of the property, they increase the notary fee calculation base. But if you take on these fees yourself, you can pay them separately so they are not factored into the calculation.
Make sure, however, that the sales agreement clearly states the net seller price, distinct from the agency fees. For example, if you buy a property for €220,000, with €10,000 in agency fees, the notary fees will be calculated on €210,000 instead of €220,000. This reduces the taxable base and allows you to save.
If the agency fees are covered by the seller, this option won’t be possible. Also, keep in mind that you will need to allocate funds to pay these agency fees separately, as they won’t be included in your mortgage.
5. Choose the right type of property to reduce notary fees
The type of property you choose to buy also has a direct impact on the amount of notary fees. For older properties, these fees generally amount to 7-8% of the purchase price, while for new properties, they are significantly lower: only 2-3%. This difference is due to much lower transfer taxes for new homes.
For instance, for a property costing €300,000, the notary fees for an older property could reach between €21,000 and €24,000, while for a new property, they would only be between €6,000 and €9,000. The difference is striking!
If you want to reduce your notary fees, it’s better to opt for a new property.
Haven’t found your dream home yet? Check out our latest real estate listings in Paris.
Now you have all the keys in hand to negotiate your notary fees and maximize your savings.