The Two Main Rates at a Glance
Registration Formalities
Sales of immovable property in France are subject to registration and land publicity formalities, in most cases merged into a single operation (the formalité fusionnée), carried out at the land publicity service of the place where the property is situated. The notaire has one month from the date of the deed to request the formality (two months for adjudications). Late filing gives rise to late-payment surcharges.
The merged formality does not apply to: property in Moselle and the communauté européenne d’Alsace (land register maintained by judicial magistrates); deeds refused for publication; and contributions and sales recorded in court judgments. Sales of shares in immovable property companies (CGI Art. 728 and 1655 ter) go through the separate double formality procedure.
Only sales of property situated in France are taxable. Where the sale is recorded in a deed executed abroad, it must be declared to the tax service within one month of the buyer taking possession. Sales of property situated abroad in a deed executed in France attract a flat duty of 5% subject to international conventions.
The Tax Base: Declared Price and Its Adjustments
The duty is assessed on the price declared in the deed, increased by augmentative charges and indemnities stipulated in favour of the seller (CGI Art. 683). Where the declared price is below the property’s market value, the administration may substitute market value as the base (LPF Art. L 17).
Key Base Rules
- VAT: excluded from the base where VAT is separately stated and borne by the buyer; included where incorporated in a single price;
- Instalments/annuities: interest excluded if clearly distinguished from capital; life annuity assessed on capital value; goods as price assessed at value of those goods;
- Augmentative charges: obligations imposed on the buyer or indirect benefits to the seller are added to the declared price;
- Diminutive charges: obligations assumed by the seller reduce the base; must be valued in the deed;
- Vente contrat en mains: formula Y × 100 / (T + 100) where Y = stated price net of non-duty costs and T = duty rate;
- Simultaneous movable/immovable sale: the deed must state a separate price for movables; absent this, the duty is assessed on the total price (CGI Art. 735).
Where the administration proves the stated price is less than the price actually agreed (dessous-de-table), three sanctions apply: civil — nullity of the side letter (contre-lettre) under C. civ. Art. 1202; fiscal — 80% fine on duties attributable to the concealed portion plus simple duties and late-payment interest (CGI Art. 1729 c); criminal — correctional offence for the parties and their accomplices (CGI Art. 1837).
The Standard Rate: 5.80665%
The standard rate results from the combination of three levies where the departmental council has set the departmental rate at the maximum of 4.50%:
| Component | Beneficiary | Rate | Legal basis |
|---|---|---|---|
| Departmental duty (droit départemental) | Département | 4.50% (maximum) | CGI Art. 1594 D and E |
| Communal tax (taxe communale) | Commune / equalisation fund | 1.20% | CGI Art. 1584 and 1595 bis |
| State surcharge (prélèvement frais d’assiette) | State | 2.37% of departmental duty = 0.10665% | CGI Art. 1647, V-a |
| Total standard rate | 5.80665% | ||
The default legal departmental rate is 3.80% (producing a global rate of 5.09006%). Departmental councils may set any rate between 1.20% and 4.50%, taking effect on 1 June for the following year. The communal tax of 1.20% is not due where the reduced-rate regime applies.
Apartment sold between private individuals for €500,000 in a département at the maximum 4.50% rate: departmental duty €22,500 + communal tax €6,000 + state surcharge €533 = total €29,033 (before the contribution de sécurité immobilière and notarial fees, which are separate).
The Reduced Rate: 0.71498%
A reduced departmental rate of 0.70% (global 0.71498% with state surcharge) applies in three main cases. The communal tax of 1.20% is not due in any of these cases.
New Builds and Building Land Subject to Mandatory VAT on Full Price (CGI Art. 1594 F quinquies, A)
Acquisitions of building land and new buildings (completed less than five years ago) from a VAT taxable person, where the transaction is mandatorily subject to VAT on the full price (not on the margin), benefit from the 0.71498% rate.
Acquisitions with a Resale Commitment: CGI Art. 1115
Acquisitions of any immovable property by VAT taxable persons who commit to reselling the property within five years of acquisition benefit from the 0.71498% rate. Failure to resell within the committed period triggers immediate liability for the full standard duty plus late-payment interest.
Construction Commitment: €125 Fixed Duty Only (CGI Art. 1594-0 G)
Acquisitions by VAT taxable persons who commit to carrying out, within four years, works leading to the production of a new building or completing an unfinished building, are exempt from the property sale duty and pay only the fixed duty of €125. Failure to demonstrate completion triggers immediate payment of full deferred duties plus late-payment interest.
Rural Property Acquired by the Fermier: CGI Art. 1594 F quinquies, D
Rural property qualifies for 0.71498% where two conditions are met simultaneously: (a) at the date of acquisition the property has been exploited for at least two years under a lease granted to the acquirer (or their spouse, ascendants, or ascendants of their spouse); and (b) the acquirer commits, for themselves and their heirs, legatees, or donees, to personally exploit the property for at least five years from the transfer date. The commitment must appear in the acquisition deed. The same rate applies to acquisitions of rural property intended to be let on a long-term lease to a young farmer benefiting from aides à l’installation within one year of transfer.
Young Farmers in Zones de Revitalisation Rurale (CGI Art. 1594 F quinquies, E)
Acquisitions in ZRR by young farmers with installation aids benefit from 0.71498% on the fraction of the price not exceeding €99,000; the surplus is taxed at the standard rate. The acquisition must occur within four years of the grant of installation aids.
Base Abatements and Exemptions
Residential Property Abatements (CGI Art. 1594 F ter)
Departmental councils may vote an annual abatement of between €7,600 and €46,000 on the departmental duty base for sales of residential buildings and garages. The buyer must commit in the acquisition deed to not using the property for any purpose other than residential for at least three years. Breach triggers payment of the supplementary duty plus late-payment interest.
SAFER Acquisitions and Sales (CGI Art. 1028, 1028 bis, 1028 ter)
All acquisitions and sales of rural property directly carried out by SAFER in the performance of their statutory missions are fully exempt from transfer duties, subject to a ten-year use commitment. Breach triggers payment of the full duty plus late-payment interest from the date on which it would otherwise have been payable.
Île-de-France Surtax on Offices and Commercial Premises (CGI Art. 1599 sexies)
An additional tax at 0.60% is levied for the Région Île-de-France on transfers of office space, commercial premises, and storage units situated in the region. The tax is added to the standard or reduced duty. It does not apply to: new-build premises subject to mandatory VAT on the full price; resale-commitment reduced-rate acquisitions; or non-sale operations (exchanges, partitions, contributions).
Rate Matrix by Transaction Type
| Transaction type | Seller | VAT treatment | Transfer duty |
|---|---|---|---|
| Old building (>5 years) | Non-taxable person | Outside VAT scope | 5.80665% |
| Old building (>5 years) | Taxable person (no option) | VAT-exempt | 5.80665% |
| Old building (>5 years) | Taxable person (with option) | VAT on option | 5.80665% |
| New build (<5 years) | Taxable person | VAT on full price (mandatory) | 0.71498% |
| Building land (seller’s acquisition opened right to deduct) | Taxable person | VAT on full price (mandatory) | 0.71498% |
| Building land (seller’s acquisition did not open right to deduct) | Taxable person | VAT on margin | 5.80665% |
| Building land | Non-taxable person | Outside VAT scope | 5.80665% |
| Any property — buyer taxable, 5-year resale commitment (CGI Art. 1115) | Any | Any | 0.71498% |
| Any property — buyer taxable, 4-year construction commitment (CGI Art. 1594-0 G) | Any | Any | €125 fixed |
| Rural property — fermier buyer, 2-year lease + 5-year exploitation commitment | Any | Any | 0.71498% |
| SAFER acquisitions and sales | Any | Any | Exempt |
| Unilateral promise of sale; sale under suspensive condition | Any | Any | €125 fixed (CGI Art. 680) |
Who Bears the Duty and the Notaire’s Role
Absent contractual agreement to the contrary, the transfer duty is borne by the buyer (CGI Art. 1712). The notaire is required to advance the registration duties from their own funds and pay them to the authorities when filing the formalité. The parties are jointly and severally liable, but in practice the notaire ensures collection from the buyer at signing.
Only the €125 fixed duty (CGI Art. 680) is levied when registering a unilateral promise of sale or a sale under a suspensive condition. The full property sale duty becomes exigible only when the condition is fulfilled and the sale is perfected. Any unilateral promise relating to immovable property must be recorded in an authentic deed or in a private deed registered at the tax service within ten days of its acceptance, failing which it is null and void.
Our French law practice advises on transfer duty structuring (standard vs reduced rate vs construction commitment), VAT and duty interaction on complex property transactions, the rural fermier reduced-rate regime, SAFER exemptions, and the Île-de-France commercial property surtax.
Book a ConsultationLegal Notice. This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. The 5.80665% rate applies where the departmental council has voted the maximum 4.50% rate; the default statutory rate of 3.80% produces 5.09006%. Departmental rates change from 1 June annually; verify current rates by département before any transaction. The reduced-rate conditions should be verified with current BOFiP doctrine. This article covers the standard regime; specific rules apply to contributions, exchanges, partitions, and other non-sale transactions. Always consult a qualified French notaire or tax lawyer.
Key Legal References
Tax base for property transfer duties: declared price plus augmentative charges and indemnities stipulated in favour of the seller; VAT excluded where separately stated; administration may substitute market value where declared price is below market value
Departmental duty default rate 3.80% (producing composite 5.09006%); maximum rate 4.50% (producing composite 5.80665%); departmental councils may set rates between 1.20% and 4.50%; takes effect 1 June
Departmental duty rate range: minimum 1.20% to maximum 4.50%
Communal tax: 1.20%; not due where reduced-rate regime applies
State surcharge: 2.37% of departmental duty component of transfer duties
Buyer bears the transfer duty by default absent contractual agreement to the contrary
Fixed duty of €125: applies at registration of unilateral promises of sale and sales under suspensive conditions; full property sale duty due only on perfection/fulfilment
Reduced departmental rate 0.70% (global 0.71498%): new builds and building land subject to mandatory VAT on full price; communal 1.20% not due
Resale commitment: acquisitions by VAT taxable persons committing to resell within 5 years benefit from 0.71498% reduced duty; failure triggers full standard duty plus late-payment interest
Construction commitment: acquisitions by VAT taxable persons committing to carry out within 4 years works leading to production of new building or completing unfinished building; only €125 fixed duty; failure triggers full deferred duties plus interest
Rural property acquired by fermier: 0.71498% reduced rate where: property exploited under lease for at least 2 years at acquisition date; acquirer commits to personally exploit for at least 5 years; commitment must appear in acquisition deed
Young farmers in ZRR: 0.71498% on fraction of price not exceeding €99,000; surplus at standard rate; acquisition within 4 years of grant of installation aids; certificate from directeur départemental de l’agriculture required
Credit-bail sale-and-leaseback: acquisitions by credit-bail companies where property immediately made available to seller under financial lease; 0.70% departmental reduced rate
SAFER acquisitions and sales: full exemption from transfer duties; 10-year use commitment; breach triggers full duty plus late-payment interest from original payability date
Residential and garage base abatement: departmental councils may vote annual abatement of €7,600–€46,000 on departmental duty base; buyer must commit to residential use for at least 3 years; may be limited to ZRR
€91,000 abatement on first onerous transfer of residential property acquired new between 1 June 1993 and 31 December 1994, after 5 years as principal residence and 3-year non-change-of-use commitment
Île-de-France surtax: 0.60% on transfers of office space, commercial premises, and storage units in the Île-de-France region; added to standard or reduced duty; not due for new-build mandatory-VAT acquisitions or resale-commitment reduced-rate acquisitions
Administration may substitute market value for declared price where declared price is below true market value; contradictory rectification procedure; 40% surcharge if deliberate understatement; 80% for fraud
Simultaneous movable and immovable sale: deed must state separate price for movables; otherwise duty assessed on total price including movables
Price dissimulation: civil nullity of contre-lettre (side letter concealing true price)
Price dissimulation: 80% fiscal penalty on duties attributable to concealed portion, in addition to simple duties and late-payment interest
Price dissimulation: criminal sanctions (correctional offence) for parties and accomplices
