Buying a Home (New) in France

ImageA ‘new’ house is generally defined as one built in the last five years, which is also the legal definition. Although new properties may lack the charm and character of older buildings, they offer attractive financial and other advantages.

– a lower deposit (5 per cent rather than 10 per cent);

– lower registration taxes;

– two years’ exemption from property tax);

– a ten-year guarantee;

– higher construction standards and therefore lower maintenance costs;

– better insulation and therefore lower heating bills);

– modern plumbing and electrics (including plenty of sockets), etc.;

–better security;

– no costs or problems associated with renovation or modernisation;

– greater resale potential, especially to French buyers, who generally prefer modern homes.

The standard of new buildings in France is strictly regulated and houses are built to official quality standards. They’re built to higher specifications than old houses and usually include roof, cavity and under-floor insulation, double-glazing, central heating, and ventilation and dehumidifying systems – it can cost up to three times as much to heat an old home without proper insulation as to heat a modern home. New properties are also covered by a ten-year guarantee (garantie décennale) against structural defects and it’s against the law to sell a new house without a warranty. Other systems and equipment are covered by a minimum two-year warranty.

SURVIVAL TIP

It’s often cheaper to buy a new home than to restore a derelict property, as the price is fixed, unlike the cost of renovation which can – and usually does – soar way beyond original estimates

Most new buildings use low maintenance materials and must (by law) have good insulation and ventilation, keeping them warmer in winter and cooler in summer. The French government encourages the building of energy-efficient homes, and France builds more new homes than most other European countries (some 60 per cent of French homes have been built since 1945). Security is a priority for most new developments (which usually have security gates) and homes often have security blinds and other security features.

On the other hand, there are a few disadvantages to buying a new home, including the following:

– VAT at 19.6 per cent must be paid on all homes under five years old sold for the first time); this can be several thousand euros.

– New homes are usually smaller than old properties and rarely come with a large plot.

– The garden may lack mature trees and shrubs.

– There may be ‘teething troubles’ with a very new building, such as cracking plaster.

– Unless you’ve chosen the decor, you may wish to change it, which will be costly and time-consuming.

–  It may have less letting potential than an older building.

– It may be less attractive as an investment, as old, ‘character’ properties generally increase in value faster than modern homes.

Most new properties are sold by developers (promoteurs) and builders, although they’re also marketed by estate agents. The monthly magazine Living France has details of ‘new-builds’ of all types in all parts of France. All new developments and builders must be underwritten by a bank (garantie extrinsèque) or the developer himself (garant

These guarantees (known as garanties d’achèvement) protect buyers from defaulting builders and developers. Where applicable, the deposit is made out to the underwriting bank and cannot be used by the developer. It’s possible to check a developer’s financial status, although your best insurance when buying a new property is the reputation of the developer or builder. Most new developments have a sales office (bureau de vente) and a show house or apartment (maison/appartement témoin).

Off-plan Homes
When buying a new property in a development, you’re usually obliged to commit to a purchase before it’s completed (or even before it’s begun!) – a process known in English as buying off plan (also confusingly called ‘on plan’) and in French as une vente en état futur d’achèvement/VEFA (‘a sale in a future state of completion’). In fact, if a development is built and largely unsold, particularly a quality development in a popular area, it usually means

Buying a home that hasn’t yet been built may seem a risky business, and there are cases of purchasers being disappointed with their purchase or even being let down or cheated by builders and developers. The most common problems are:

– building not completed on time (or at all);

– additional charges for items believed to be included in the price;

– additional charges for ‘problems’ encountered during construction;

– poor quality of construction, finish or fittings in comparison with the show home, sales brochure or specification.

CAUTION

Other disadvantages of buying off plan include VAT at 19.6 per cent on building costs, although this is usually included in the price quoted to you, and the fact that you must start paying for your home long before you can occupy in it.

Nevertheless, the purchase procedure is usually safe (some 70,000 homes are sold off plan every year in France) and you can build into your contract clauses that protect you from most of the above problems. Before signing a contract, you should check the following:

– that the builder is reputable and reliable. The fact that he’s registered and has a SIRET number is no guarantee that he will do a good job.

– that the land on which your property is to be built is suitable, e.g. not solid rock or liable to flooding or subsidence, as some builders don’t engage a surveyor in order to save money;

– exactly what is included in the price in terms of ‘ancillary’ items, such as drives, topsoil (and whether it’s adequate), the removal of rubble and even the cost of the electricity and water consumed during construction, as well as regarding fixtures and fittings, as a show home often features extras and ‘luxury’ items that can add as much as 25 per cent to the cost. Note also that the purchase procedure for a property yet to be built is different from that for a finished home .

On the other hand, there can be several advantages to buying off plan as opposed to buying a completed property. Off-plan properties are generally cheaper than built homes. You can usually choose your bathroom suite, kitchen, fireplace, wallpaper, paint, wall and floor tiles, and carpet in bedrooms, all of which may be included in the price. You may also be able to alter the interior room layout, although this will increase the price, but you won’t be able to make major structural alterations or changes of material or design.

Most developers will negotiate over the price or include ‘free’ extras (such as a fitted kitchen when it isn’t included in the price), particularly if a development isn’t selling well. Note that any changes or additions to a property, such as including an American kitchen, a chimney or an additional shower room, should be made during the design stage, as they will cost much more to install later.  All fixtures and fittings will, of course, be brand new, and you’ll benefit from modern insulation, ventilation, heating and other materials and systems. And, of course, the building will have a ten-year guarantee. You’ll also pay a lower deposit and lower registration fees on an off-plan home , which will be exempt from property tax for two years from 1st January following the completion date.

Resale Homes
Buying ‘new’ doesn’t necessarily mean buying a brand new home where you’re the first occupant. There can be many advantages in buying a modern resale home rather than a brand new one, including better value, an established development with a range of local services and facilities in place, more individual design and style, no ‘teething troubles’, furniture and other extras included in the price, a mature garden and trees, and a larger plot.

With a resale property you can see exactly what you’ll get for your money and the previous owners may have made improvements or added extras such as a swimming pool that may not be fully reflected in the asking price. The disadvantages of buying a resale home depend on its age and how well it has been maintained. They can include a poor state of repair and the need for refurbishment, redecoration or new carpets; inferior build quality and design, no warranty (i.e. with a home that’s more than ten years old), termite or other infestations, and (in the case of a community property) the possibility of incurring high assessments for repairs.

Excerpted from “Buying a Home in France” (Survival Books) by David Hampshire

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