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reduced VAT
Nevertheless, as it is a new property you will be paying VAT at the rate of 20%. In some cases, this VAT may later be reimbursable on the sale of the property, provided you have owned it for a minimum period, e.g. 9 years.
The advantagesto buying“Off-Plan”
There are quite a few advantages to buying an off-plan property in France. Here are the main benefits:
1 – The level of consumer protection in France
The off-plan sales procedure is strictly controlled under French law. The purchase process includes a clause known as the “garantie d’achèvement”. This clause guarantees that the building work will be completed should your developer go bankrupt, fail to complete the work on time or to/for the agreed standard or price. That means that there will be no nasty surprises for you the buyer, during the purchase procedure.
2 – The building guarantees included in the VEFA contract
When it comes to building guarantees, the law is very much on the side of the owner in France. According to the terms of a VEFA contract, your developer is required to give a one-year completion guarantee to cover any snags after you receive the keys to your new home. They are also required to provide you with a
They are also required to provide you with a two-year guarantee for all the fixtures and fittings. And finally, they must also supply you with a ten-year structural guarantee for your property ensuring that you won’t need to pay for any building work for your new home for quite some time.
3 – Lower notaire fees
One of the main advantages of buying an off-plan property in France is saving money on administrative fees. Notary fees for off-plan or new build properties are fixed at 2-3% rather than the usual 6-7% for property over 5 years old.
4 – No Property Ownership tax for the first 2 years
Similarly, when buying an off-plan property in France, you will be exempt from paying the Property Ownership tax or Taxe Foncière for the first 2 years after purchase.
5 – Excellent return on Capital Gains
Another benefit to buying off-plan is the potential for capital gains once your property is finished. As building work reaches completion, the value of your property will hopefully rise whilst the purchase price remains the same. Therefore, should you decide to sell, you’ll benefit from the rise in value without having to carry out costly renovations to your home.
6 – The very latest construction materials and techniques
New builds in France must conform to the latest construction rules and regulations. Therefore, your property will come with low energy consumption plus high-quality sound and heat insulation as standard.
7 – Customised design
As previously mentioned, buying off-plan allows you the luxury of customising your new property. From designing a fabulous open-plan kitchen to an ultra-luxurious ensuite bathroom, it’s entirely up to you.
Any disadvantages to purchasing property “Off-Plan”?
While the off-plan purchase procedure is strictly controlled by French law, there’s always the possibility of hitting a bump in the road. Potential problems may arise if your developer takes longer than planned to carry out the construction work. Delivery dates will be pushed back which could be a problem if you’re planning to use your property as a rental investment.