notaires' fees - do you know what you're paying for?
With the summer holidays now over and the children back to
school, it won't be long before parents everywhere are being asked
for help with maths homework (statistics, percentages and
multiplications). We thought therefore that it would be a good idea
to brush up on our own maths knowledge before our children come to
us with maths problems that we may not be able to resolve!
To help with this exercise, we will be taking a look at the fees
charged by notaires and how these are calculated. Whilst notaires
always provide clients with a figure to complete the transaction,
they rarely break it down unless specifically requested.
Interestingly, clients often question the justification for the
amount that notaires charge for completing a transaction, such as
the sale/purchase of a property, but you may be surprised by the
actual figure the notaire charges when compared to those of other
professionals involved in the transaction, such as estate
agents.
Notaire's fees are regulated by the Decree dated 8 March 1978.
When a notaire completes a deed, the notaire's accounts assistant
will calculate the cost of the deed and any tax payable. A document
similar to an invoice, called taxe de l'acte, will be
prepared and a breakdown of costs. The taxe is split into
four sections identifying the fee, disbursments and taxes to pay.
These are set out below.
1. emoluments d'acte
For each transaction the notaire will be entitled to either a
fixed fee which is set out in a table or a percentage of the value
of the transaction.
This fee is called emolument d'acte and is based on the
value of the property for a purchase, the value of the estate for a
deceased person's estate and the amount of rent if it is a lease or
units for some specific deeds. There are two different
émoluments that will depend on the nature of the deed to
be completed.
The emolument fixe is calculated by unit called
unité de valeur. Each unité de valeur is worth
3.65€. A notaire will not be entitled to charge more than the units
corresponding to a deed that he is requested to sign and will have
to apply the fee corresponding to the deed. For instance the
preparation of a contract to set up a right of way will be charged
at 50 unités de valeur = 182.50€ exc VAT.
The second fee is the émolument proportionnel. This is
the most common fee charged by the notaire and corresponds to a
percentage of the transaction. The average percentage for most of
the transactions is 0.825%+328.75€ for transactions above 30,000€.
The figure will be the remuneration of the notaire for the
preparation of the contract, meeting with clients and any liaison
regarding the file.
2. emoluments de formalités
The emolument de formalités corresponds to the
disbursements paid by a notaire for obtaining documents and
carrying out the formalities to complete a transaction. These
typically include a birth certificate, the urbanism note, notifying
the managing company, banks, insurance company, photocopying title
deed for the different parties involved in the transaction. Each
formality will have different unités de valeur, at 3.65€
each. For example, the request of birth certificate is three
unités de valeur = 10.95€, the urbanism note is 15
unités de valeur = 54.75€. The émoluments de
formalités will also include photocopying the deed of sale for
the clients, the Land Registry and the notaire's own database.
3. débours
The débours are the disbursements that a notaire has to
pay on behalf of a client. They can relate to international postage
(if agreed with the client), managing company's charges, various
taxes or fees owed to third party. Until completion takes place the
notaire may not be in a position to provide you with an accurate
figure but will give an estimate.
4. taxes, including stamp duty
The last section will be the taxes, like stamp duty, paid on the
deed. The purchase of a property will attract payment of stamp duty
at 5.09%, which is included in the provision of fees given by the
notaire. In addition there will be a fee for the Land Registry
corresponding to 0.10% of the price.
To give you an example, let's calculate the approximate fees for
the sale of a property at 275,000€. The notaire will probably
request a provision of 19,200€ and I would not be surprised if a
refund is returned to the purchaser with his title deed. The fees
would be split as follows:
Emoluments d'acte: 275,000 x 0.825% = 2,268€ +
328.75€ = 2,596.75€
Emoluments de formalités: it is difficult to
calculate them without knowing the formalities required or the
length of the contract to be photocopied. We can estimate them at
600€ bearing in mind that the following document will automatically
be required (birth and marriage certificate at 10.95€, urbanism
note at 54.75€, certificate of completion at 21.90€ and insurance
notification at 14.60€).
Debours: Again it is difficult to value them
depending on the nature of the transaction but a notaire would
request a provision of 1,000€.
Taxes:
Stamp duty to be payable: 275,000 x 5.09% = 13,998€
Fee for the land registry: 275,000 x 0.10% = 275€
Land registry searches: 28€
In addition VAT at 19.60% will apply to the emoluments
(2.597+600) 626€
Finally I mention that notaires have the right to charge a free
fee called honoraire de l'article 4. This additional fee
is also regulated by the Decree and can be fixed between the
notaire and his client for additional work, such as a legal
consultation.
This article has been published in French Property
News, the most comprehensive guide UK guide to buying
property in France.
