2024-10-25 04:15:00
Real estate is back at the center of budget discussions. After the prospect of a return of the housing tax, should we now expect an increase in notary fees? Communities are worried about their finances.
Matignon is studying the possibility of increasing by one point the amount of DMTO, transfer taxes for valuable consideration, which are commonly called “notary fees”, and which buyers pay when signing the acquisition of a property. GOOD.
Between 15 and 20% of department resources
The departments collect part of its costs: transfer taxes represent between 15 and 20% of the departments’ resources. Last year, they exceeded 11 billion euros. Except that these revenues have melted with the real estate crisis in recent months
To compensate, the Association of Departments of France is asking for a temporary increase in the fees they can collect. They would thus be set at a maximum of 5.5% of the sale price of the property. One point more than today, or 2,500 euros more for a transaction of 250,000 euros. “We are in an explosive situation,” says François Sauvadet, the president of the Association.
“In recent years we have experienced an increase, like we have never seen, in social spending, as well as child protection, aging of the population, disability. And at the same time; this is what which is unprecedented, we have a drop in our revenue and we no longer have the possibility of resorting to taxes. So, we are trying to propose solutions to the government, being well aware of the situation that the country is going through. -he know.
The risk of stalling the recovery
It is true that the fall in transactions has contributed to weighing down the accounts of local authorities. But watch out for backfire. Taxing real estate more could maintain the crisis it is going through, warns Christophe Demerson, president of the 35 million small owners association.
“People are worried. It’s the whole subject that is anxiety-provoking. And today, a young person, a first-time buyer, when he wants to buy, he says to himself: what sauce in ‘quotes’ I’m going to be eaten with.” he recalls. The Minister of Housing herself warned against the risk of seizing up a machine which restarts timidly.
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Interview with Financial Analyst Marc Dupont on Potential Changes to Notary Fees
Interviewer: Thank you for joining us today, Marc. Recent discussions indicate that real estate is once again at the forefront of budget considerations, particularly with the possible revival of the housing tax and now the potential increase in notary fees. Can you give us some context on this situation?
Marc Dupont: Absolutely. The housing market has always been a critical economic sector, and any changes in taxation can significantly impact buyers’ behaviors and, by extension, the overall market. Notary fees, or transfer taxes, are a substantial part of this conversation, especially as they represent 15 to 20% of departmental resources in France. The government is considering increasing these fees by one percentage point to bolster local funding.
Interviewer: How are communities reacting to the possibility of higher notary fees, and what are their concerns?
Marc Dupont: Communities are understandably concerned about their finances. Increasing notary fees could deter potential buyers and slow down the housing market, which has broader implications for local economies. These fees are often one of the first costs that buyers encounter, and rising them could push homeownership further out of reach for many individuals and families.
Interviewer: Given that transfer taxes contribute significantly to departmental budgets, how do you think this increase will affect local services?
Marc Dupont: If implemented, the increase in notary fees could provide a much-needed boost to local budgets, allowing departments to maintain or improve services. However, there’s a fine balance to strike; while additional funding for local services is crucial, if the fees discourage home purchases, this could lead to decreased long-term revenue. It’s a classic case of needing to weigh immediate financial needs against sustainable economic growth.
Interviewer: Some are speculating that these measure adjustments could result in a backlash from the real estate sector. What’s your take on that?
Marc Dupont: That’s a valid point. The real estate sector is always sensitive to tax changes. An increase in notary fees might cause frustration among real estate professionals and prospective buyers, potentially leading to calls for reform or even protests against rising costs. It’s crucial for the government to communicate clearly about the reasons for these changes and to address any concerns that may arise from stakeholders.
Interviewer: what advice would you give to potential homebuyers who may be concerned about these fee increases?
Marc Dupont: I would advise potential homebuyers to stay informed about these developments and factor in any expected increases in fees when budgeting for a home purchase. It’s always good practice to consult with a financial advisor or a real estate professional who can provide insights on current market trends and help navigate the potential changes. Planning ahead will be key in making informed decisions in this fluctuating market.
Interviewer: Thank you for your insights, Marc. It will be interesting to see how these discussions evolve and impact the housing market in the coming months.
Marc Dupont: Thank you for having me!
M potential buyers and even stall the recovery of the housing market. What are your thoughts on this concern?
Marc Dupont: That’s a valid concern. Increasing notary fees might create an anxiety-provoking environment for buyers, particularly first-time homebuyers who are already facing a challenging market. If buyers feel uncertain about additional costs, they may delay or forgo purchasing a home altogether. This could exacerbate the current stagnation in transactions and further impact local revenue streams. Policymakers need to recognize that aggressive taxation in this area could backfire, ultimately making the housing market less accessible and undermining broader recovery efforts.
Interviewer: what alternative solutions might be considered to address the departments’ financial pressures without negatively impacting the housing market?
Marc Dupont: One alternative could be to explore more balanced approaches to taxation that do not solely rely on increasing fees for buyers. For instance, local governments could advocate for broader economic measures that promote job creation and economic growth, thereby expanding their tax bases. Additionally, streamlining services and optimizing existing resources could mitigate the need for increased taxation. it’s essential for stakeholders to collaborate and find innovative solutions that support both local financing needs and the vitality of the housing market.
Interviewer: Thank you, Marc, for your insights on this pressing issue. It will be interesting to see how this situation evolves in the coming months.
Marc Dupont: Thank you for having me. It’s a crucial discussion, and I hope we can find a balanced path forward.
