New Year notary fee bombshell leaves thousands in turmoil
Whilst the French population were engaging in end of year festivities, the French government launched a bombshell on the French property market, dampening spirits across the country.
The tax law relating to reduced notary fees on properties under five years old was abolished with almost immediate effect.
Up until the amendment, existing properties that were under five years old and being sold for the first time were eligible for reduced notary fees, a key selling point for their owners.
The change in the law which was made on December 30th and became applicable on January 1st, means that the reduced fees are no longer applicable and that anyone buying a property under five years old will now have to pay the standard notary fees, usually around 7% of the property price. This is a mammoth increase from the reduced fees of approximately 3%.
The change of law can be viewed as positive by some as it promotes equality between properties regardless of their age. It also shows the French governments determination to tackle its deficit.
In a massive twist which has many in turmoil currently, the change in the law is applicable immediately and does not offer a grace period for purchase agreements that were signed prior to the amendment.
This means that buyers have to find thousands more Euros in order to complete on their purchases, which for some isn’t a possibility.
As yet, the full impact of the law change is not known and wild rumours are flying around of purchasers cancelling. There is no precedent for this so it is not known whether buyers can effectively withdraw from the purchase due to there being a “significant”
At the time of writing French Mortgage Direct have been solicited by buyers looking to borrow extra on their French mortgages in order to cover the shortfall. This means re-submitting the application in order to obtain approval for higher borrowing.
Thankfully, French mortgages are still at an historical low with 20 year fixed rate mortgages starting at just 3.45%.
For more information please contact French Mortgage Direct on 00 44 800 530 0673 or visit www.frenchmortgagedirect.com