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Purchase new housing

Purchase new housing

You have in mind a real estate acquisition project. Naturally, you ask yourself several questions, because you want to optimize your investment. Before talking about Carrez law, price per square meter, landscaped garden, balcony with sea view, materials, connection to water and electricity and requesting credit from financial organizations, you must make a choice that will determine your other decisions: new or old. Investing in new real estate has undeniable advantages: guarantees, quality, comfort, modern equipment, energy performance, compliance with safety and environmental standards in force, tax advantages that encourage investment in new… But are new homes really up to the mountains and wonders they promise? What is their hidden side? Barnes Mont Blanc talks about the advantages, disadvantages, taxation and specifics of buying new real estate.

What are the advantages of new housing?

Some seem obvious, others less so. Whether you are considering buying a new property to make it your main home, your second home or to rent it out (rental investment), your future new home will have several advantages. Here are the main assets to consider and put in your balance before making your decision:

  • Better comfort: Who says new housing almost always means an improvement in living comfort. Houses and apartments of recent construction are better oriented, better furnished and better equipped than older dwellings. They are well insulated and have large openings to let in natural light. The materials are of good quality and meet mandatory standards such as NF Habitat and RT 2012. The electrical installations are suitable for the current use of electrical devices. In addition, new homes are often delivered with outbuildings such as a cellar or garage, very valuable and very useful spaces. The interior fittings also contribute greatly to the comfort of life. Many of them, such as parquet, tiles, roller shutters and sanitary fittings, are already present and delivered with the new accommodation. In new houses, it is also possible to inherit a new terrace, a loggia or balconies in the living room or in the bedrooms.
  • Great peace of mind: By investing in new real estate, you can in principle sleep peacefully as you will not have to carry out work for at least 10 years, or even more than 15 years. This aspect gives you some financial security and allows you to reconcile with your portfolio after signing the deed of sale.
  • A written guarantee contemplated by law: The purchase of a new home offers you three main guarantees: the biennial guarantee which covers the equipment, the ten-year guarantee which covers structural problems for 10 years, the guarantee of perfect completion which protects against defects after the end of the work and the handing over of the keys.

Good to know: If you plan to buy a new apartment, the co-ownership charges will be lower than those which entail the purchase of an old apartment.

Guarantees, an undeniable asset

The acquisition of a house or an apartment is an important real estate transaction which can have serious consequences. In terms of security, investing in new is much safer than the old. Buying new builds opens the door to three guarantees that can protect you against unpleasant surprises for several years:

  • All the defects encountered after the delivery of the goods are covered by the guarantee of perfect completion which obliges the manufacturer to deliver a good without defect. If a defect is detected, the manufacturer must repair it within one year.
  • All damage encountered at the level of the structure during a period of 10 years from the date of delivery of the goods is covered by the ten-year guarantee. The necessary repairs are also the responsibility of the manufacturer.
  • All equipment delivered with the property is covered by the biennial warranty. If new equipment has a defect within 2 years of delivery of the goods, you can claim repair or replacement if the defect cannot be repaired.

Housing completed or purchase off plan: how to choose?

When investing in new, you have two options. You can acquire a property which has just been built or a property whose construction has not yet started, via a real estate agency or not. In the second case, we talk about buying off plan. You hesitate between these two options. Here are the main things to consider before making your decision.

Housing completed

Acquiring a new, completed home is a turnkey solution. Your future house or apartment has just been built. Your property is brand new, nobody has occupied it before you and you already know concretely what it looks like. You took the time to visit it, to enter each room, to discover the equipment included and to imagine the future layout of the living spaces. You like the tiling in the bathroom and the parquet in the living room, your garage is large enough to accommodate your car and the temperature in your cellar is pleasant. In addition to a careful visual inspection, you must ask the builder to provide you with the following documents, starting with the building permit and the certificate of compliance. Also make sure that he gives you the acceptance report for your new home and the manufacturer's insurance certificates.

Off-plan or off-plan purchases

We’ll talk to you about selling in a state of completion (VEFA) or buying a plan, but don’t worry, it’s the same thing. In this case, you will have more uncertainties because you will not be able to see or visit your future new real estate for a very simple reason: it has not yet been built. Rest assured, this practice is very common and carried out by property developers. When developers launch a real estate program, they advertise it before they have laid the foundation. Do not wait until the work begins if you are seduced by a real estate program in an eco-neighborhood in your city, because the apartments are generally sold out before the start of the work. If you decide to buy off plan, you and the promoter make a commitment that each party must respect. The promoter agrees to build the new property he has described to you, and you agree to buy it. This double commitment is made in writing: the act of sale. Make sure that the document contains all the essential information such as a detailed description of your future accommodation, the price awarded, the delivery date, the completion guarantee and the payment terms. In the context of off-plan purchases, the purchaser is unfortunately not immune to unpleasant surprises despite the commitments made by the promoter. Sometimes the house or apartment may not look exactly like the promised good, or the product may be delivered a few months or more than a year late. 

Fiscal advantages 

To encourage the purchase of new real estate, the government has put in place a battery of tax systems. The existing tools aim to energize the market and help owners to finance their property. They include in particular: 

  • A deletion of VAT: in reality, it is already included in the price of new housing (which is not the case for old housing). You will therefore not have to pay this tax when purchasing a new home. 
  • A zero-interest loan to partially finance the mortgage requested to buy your new property, without having to pay interest. This help is not offered to all buyers. Its access depends on your resources. 
  • A reduction in notary fees: For the purchase of old housing, the notary fees amount to 7 to 8% of the price of the property. If you buy a new home, you will pay between 2 and 3% notary fees. 
  • Exemption from property tax: Investors who buy new housing are exempt from this tax for the first two years after completion of the work. 
  • Rental investment: If you plan to rent your new property, you can benefit from other assistance. 

Payment terms for new homes 

You have found the new home or apartment of your dreams in the targeted geographic area and all the indicators are green. Now is the time to address the issue of funding. The payment methods for a completed accommodation are not the same as for a purchase on plan (VEFA). 

In the case of the acquisition of already completed accommodation, the rules are similar to those which apply for old accommodation. A promise to sell is signed. At this time, the buyer must pay a deposit of 10% of the price of the goods. It has a 10-day withdrawal period. If he reverses his decision within 10 days of signing the promise to sell, the deposit is fully refunded. This period begins upon receipt of the promise to sell by the promoter or the manufacturer. The remaining sums are paid when the deed of sale is signed. To the price of the property, you must add ancillary costs such as notary fees, taxes and mortgage fees. 

For a purchase on a plan, payments are made in several installments, as the work progresses. You must first pay a security deposit upon signing. You must then pay 35% (maximum) of the price granted when the foundations are finished, then 70% (maximum) after the installation of the roof and the frame. The remaining sum is payable at the end of the work. 

Important: Make sure you calculate your borrowing capacity and know the maximum amount of mortgage that can be granted to you before buying your new home. 

What if you invest in a wine estate or a work of art?

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