Having signed all the sales papers, you are now the new owner of agricultural land. As in the case of any transfer of real estate or land – inheritance, donation or purchase, notary fees will have to be considered. Many criteria, such as the value of the land or the function of the two parties (seller and buyer), mean that the value of these costs is very varied. So what do you need to know about notary fees for the purchase of agricultural land?
Notary fees, What is that ?
Notary fees are also known as “acquisition fees”. These are costs that the buyer grants to the notary, due to various elements concerning the future possession of real estate or land. Notary fees concern: registration fees and land advertising tax, disbursements (costs charged by the notary which will have to be reimbursed later) and fees and emoluments (remuneration of the notary, value sometimes negotiable ).
Note that the possibility of negotiation of fees was announced on February 26, 2016 by decree No. 2016-30. Prior to this date, for goods less than 45,735 euros, the fees were 5% excluding VAT of this sum compared to 2.5% for goods above this sum. From now on, notaries set the tariff of fees according to the different cases. As of May 1, 2016, notaries have the possibility of offering a maximum discount of 10% for properties equivalent to 150,000 euros and more.
Notary fees are necessary when buying building land, non-building land or even agricultural land.
Notary fees for agricultural land
The calculation of notary fees for agricultural land depends on several parameters. The sale may be between individuals or between a professional and an individual.
The sale of agricultural land from individual to individual
Generally, the rules concerning notary fees for agricultural land and those for non-building land are about the same. Therefore, during the purchase of agricultural land, it is entirely possible that the buyer does not have to pay VAT. However, in this case, it should not be surprising to see a particularly onerous value of notary fees. The rates for these costs are mainly fixed, and only the fees and the estimate of the disbursements vary according to each case and according to the value of the land to be purchased.
By way of simulation, for an agricultural land of 1,000 euros, for example, the notary fees amount to 1,500 euros, or even more. If the land has a value of 10,000 euros, these costs will cost almost 2,000 euros in total.
Notary fees depending on the situation of the seller
Here, it is a question of whether the seller is subject to VAT or not. If this is not the case, VAT is not applicable to the sale of agricultural land, regardless of the status of the buyer.
The seller not subject to VAT
In general, in the present case, the buyer, if he is a private individual, simply respects the registration fees, according to a rate of between 5.09% and 5.81%.
If the buyer is subject to VAT, he has the choice between two options. If he undertakes to use his land to carry out agricultural work there for the 4 years following the acquisition of the land, he will be subject to a fee of a fixed value of 125 euros. If he undertakes to resell the land 5 years after its acquisition, he will be subject to a reduced fee of 0.715%.
The seller is subject to VAT
In the first case, it may happen that the seller did not claim the tax paid during the sale. The costs paid by the buyer will then generally consist of transfer duties which are worth between 5.09% and 5.81%.
In the case where there was the recovery of the VAT paid by the seller during the deed of sale, the transfer duties to be paid by the buyer will be reduced to a value of 0.715%. If the buyer is subject to VAT, the same options mentioned above are possible: obtaining a reduced rate of 0.715% if he undertakes to resell his agricultural land after 5 years or the application of a fixed fee of 125 euros if he carries out agricultural work on his land during the 4 years after its acquisition.
Notary fees for the purchase of agricultural land then vary mainly according to the various situations of the seller and the buyer, whether or not they are subject to VAT. Contract between professionals or between individuals, certain values included in these costs remain fixed, with the exception of disbursements and fees.
How to accurately determine notary fees when buying agricultural land?
To help you calculate your notary fees for the purchase of your future agricultural land, it is essential to know that a regulated scale has been put in place, following the decree of February 26, 2016, to determine the amount notary fees:
- When the value of agricultural land is between €0 and €6,500, the applicable rate will be 3.945% of the purchase value of the land.
- If the purchase price of agricultural land is between €6,500 and €17,000 then the applicable rate will be 1.627%.
- For agricultural land whose purchase price is between €17,000 and €60,000, the rate will be 1.085%.
- And for all land over €60,000, the applicable rate will always be 0.814%.
This scale should have changed from March 2020, but following the Coronavirus crisis, the new rates will not be applicable before January 2021. Here are the rates to come next year:
- If the price of agricultural land is between €0 and €6,500, the applicable rate will be 3.870% instead of the current .3945%.
- For land with a value between €6,500 and €17,000, the rate will increase from 1.627%. at 1.597%.
- For a purchase price between €17,000 and €60,000, the applicable rate will be 1.064% instead of the current 1.085%.
- And finally, for land over €60,000, the applicable rate goes from 0.814% to 0.799%.