France: Buying a New Home

Overview

A ‘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 (see above), they offer attractive financial and other advantages (see below).

• A lower deposit (5 per cent rather than 10 per cent).

• Lower registration taxes.

• Two years’ exemption from property tax.

• A ten-year guarantee (see below).

• Higher construction standards and therefore lower maintenance costs (see below).

• Better insulation and therefore lower heating bills (see below).

• Modern plumbing and electrics (including plenty of sockets), etc..

• Better security (see below).

• 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.

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 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.

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

Most new properties are sold by developers (promoteurs) and builders, although they’re also marketed by estate agents. All new developments and builders must be underwritten by a bank (garantie extrinsèque) or the developer himself (garantie intrinsèque), who must meet certain liquidity and other requirements. 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).

© Survival Books Limited 2005

“Buying a Home in France 2006” 6th Edition, David Hampshire.

Reproduced with the permission of Survival Books Limited.

Further information on this topic can be found in “Buying a Home in France 2006” 6th edition, by David Hampshire.

For extensive, annually updated information about buying a property in France, you can purchase this book at www.survivalbooks.net