Finance Act 2025: What is the impact on registration fees?
The Finance Act 2025 introduces the possibility for departments to increase the rate of the departmental land registration tax or registration fees applicable to property transfers.
The rate of the departmental tax, which was previously capped at 4.5%, can now be increased by departmental councils' resolutions, without exceeding 5% of the sale price.
This measure is intended to apply to sales deeds closed between 1 April 2025 and 31 March 2028.
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Some provisions of the Finance Act 2025 could directly influence the forecasts of newly established or ongoing real estate business plans. This is particularly the case with the modification of the land registration tax or registration fees concerning the departmental component.
The Finance Act 2025, promulgated on 14 February 2025, and published in the Journal Officiel on 15 February 2025, grants departments additional flexibility by allowing them to increase the rate of the departmental tax applicable to all transfers for consideration1 of buildings completed for more than five years and for which no specific commitment (to build or resell) is made.
Reminder of the components of the registration fee or land registration tax
Property transfers are subject to the payment of the land registration tax or registration fee, which can be broken down as follows:
- the departmental tax (3.80% or 4.50%),
- the additional municipal tax (1.20%),
- a levy for assessment and collection costs of the departmental tax (2.37% calculated on the amount of the departmental tax).
Transfers for consideration of buildings are also subject to notary fees, the real estate security contribution (0.10%), and, for buildings located in Île-de-France, an additional tax on transfers for consideration of office premises, commercial premises, and storage premises (0.60%)2 .
A possible increase in the departmental rate
As mentioned above, the rate of the departmental tax is amended by the Finance Act 2025. For reference, the rate of 4.50% applies in most departments, except for Indre, Morbihan, and Mayotte, which apply the common law rate of 3.8%3 .
The Finance Act 2025 allows departmental councils to increase the rate of the land registration tax or registration fees beyond 4.50%, up to a limit of 5%.
Key points to remember
- A possible significant increase in transfer fees for consideration
Depending on the resolutions of each department, the overall rate, which could previously reach 6.40% for buildings completed for more than 5 years located in Île-de-France, could thus reach 6.92%.
- A temporary measure: from 1 April 2025 to 31 March 2028
This measure is intended to apply only for a transitional period, for deeds signed between 1 April 2025, and 31 March 2028.
- A precise schedule
Before the increase is effectively applicable, departments must deliberate on the rate increase. Once the resolution is notified, the implementation of this increase will occur according to a precise schedule set by the Finance Act 2025:
| Date of Notification of Resolutions | Effective Date of Increased Rate |
|---|---|
| Until 28 February 2025 | 1 April 2025 |
| From 1 March to 31 March 2025 | 1 May 2025 |
| From 1 April to 15 April 2025 | 1 June 2025 |
| From 16 April to 30 November 2025 | 1 January 2026 |
| From 1 December to 31 December 2025 | 1 February 2026 |
| From 1 January to 31 January 2026 | 1 March 2026 |
| From 1 February to 29 February 2026 | 1 April 2026 |
| From 1 March to 31 March 2026 | 1 May 2026 |
| From 1 April to 15 April 2026 | 1 June 2026 |
| From 16 April to 30 November 2026 | 1 January 2027 |
| From 1 December 2026 to 15 April 2027 | 1 June 20274 |
| From 16 April to 30 November 20275 | 1 January 2028 |
| As from 1 April 2028 | Rate applicable on 31 January 2025 |
- An exception for first-time buyers
The Finance Act 2025 provides an exception: the increase from 4.50% to 5% does not apply to the acquisition of a primary residence for first-time buyers6. In this regard, the Finance Act 2025 also provides that departmental councils can reduce or even exempt these acquisitions from the land registration tax or registration fees.
Staying informed
Decisions regarding the increase in the departmental tax rate must be published by the departments and can be followed in the specialized real estate tax press. Some departments have already indicated that they will use this increase option. This is the case in Paris, for example, where the department has already voted to raise the departmental tax to 5%.
In conclusion: a significant measure to integrate into current business plans and negotiations
This measure is of particular interest to investors currently building their business plans on real estate acquisitions planning to close a deed of sale from 1 April 2025. The total cost of acquisitions could be influenced by this modification, and the measure could be subject to price negotiations between buyer and seller in the affected departments. Although temporary, this measure requires particular attention for acquisitions planned during the relevant period.
1Excluding contributions (“apports”) for consideration
2Article 1599 sexies of the French Tax Code
3Article 1594 D of the French Tax Code
4As this period has been omitted by the legislator, the notified deliberations between 1 December 2026 and 15 April 2027 should come into force in accordance with the common law provisions of Article 1594 E of the French Tax Code, i.e. on the following 1 June.
5In our opinion, deliberations notified as from 1 December 2027 should not benefit from the increase in the departmental tax rate under the common law provisions of Article 1594 E of the French Tax Code.
6Article 1594 F septies II. B of the French Tax Code
