Buying new ?
Buying in a new development rather than in existing buildings is a matter of a personal life plan. Purchasing a property in an older building is often a matter of an impulse. Buying in a new development often involves other more pragmatic criteria, or a long term investment strategy. Besides the fact that the property is delivered ready to be moved in, purchasing new accommodation shows many more advantages.
The reasons to choose new
In new developments, the architects see to optimizing surfaces and volumes in order to create a pleasant, luminous and functional living space often fitted with integrated storage. Moreover, in the last few years, public authorities in France had construction norms adopted that impose that housing be imperatively built in compliance with the thermic regulation 2012 (RT 21012) or subject to environmental standards in view of developing renewable energy such as Low Energy Houses (Bâtiment Basse Consommation - BBC) or High Environmental Quality (Haute Qualité Environnementale - HQE). These properties thus guarantee optimized energy consumption thanks to powerful insulation and to energy efficient equipment to heat, cool or light up. In new constructions, comfort often equals saving.
In this field, new constructions being subject to the latest safety regulations no works are to be made. Accommodation is up to the various standards required (earthquake protection, fire, disabled, etc.). Some technological options that used to be labelled as "luxurious" are today integrated as standard on the new projects such as videophones, a reinforced front door and/or with a secured lock, smoke detectors in the common or private areas.
Buying a new project and off-plans (known as VEFA: sale on condition of future completion) enables you to create a custom-made accommodation. Some equipment, material, colours, are often available à la carte, giving you an option to personalize the flat according to your tastes and needs. An offer actually protected by the developer's warranty, that will avoid some troubles and major expenses if you were to choose to make renovation or personalization works in your accommodation in older buildings.
The cost price
One should sometimes be careful about a strong prejudice that said that the prices in older buildings are always inferior to those in new constructions. In absolute value, probably but is this value reliable? Indeed, when you compare the accommodation on equal levels of comfort and safety, we notice that the simple compliance of the old building can quickly increase its final cost.
Reduced notarial fees
These transfer fees often wrongly called "notary's fees" are added to the purchase price and are payable by the purchaser most of the time. The notarial fees in older buildings are of approximately 7.7%, while there are about 2.5 to 3% in new properties. A significant direct saving in the scope of an investment.
The developer's warranty
In the scope of the purchase of a new housing completed or off-plans, you automatically have the warranties committing the developer's liability.
If you notice any troubles after the reception of the works in your accommodation, you can act by claiming three warranties against constructors or contractors. The starting date of these warranties corresponds to the date on which the seller (developer) received the building.
There are three kinds of warranties:
The guarantee of perfect completion (1 year):
It imposes that the contractor repairs all the damages (hidden defects, defect in conformity, malfunction because of a lack of maintenance) signalled during the year following the reception of the works, no matter their importance and their nature.
The two-year warranty for proper operation (2 years):
It covers all the defects in operation noticed on the equipment (that can be taken apart or replaced). The two-year warranty imposes to the contractor to fix or replace it.
The ten-year guarantee:
Covered by the developer's structural-damage insurance, it imposes to the contractor the repair of the damages that have occurred in the 10 years, and that compromise the solidity of the structure (risk of collapse) or make the building improper to its usage (lack or water-tightness, large cracks).
It covers the fittings that are inseparable from the structure (pipes, lighting…).
Low maintenance costs and charges
Because of their high technical and regulation levels in teems of insulation, new accommodations have a low energy cost. Some are even fitted with individual heating systems (often with a heat pump) that bring about substantial savings for the user on his energy bill.
Because of their recent construction and to the new applicable standards, new buildings require for maintenance, much lower condominium charges than an older building. Thus, in new accommodations the owners are protected from exceptional and very expensive works such as the repainting of a façade or the renovation of a roof.
The purchase of a new property makes the owner eligible to an exoneration of land tax for the first two years of owning the property. In some cases (if the building has a level of energy efficiency superior to the one required by law) this exoneration can be extended to 3 years.
There are also some tax credits that enable to optimize your return on investment particularly for the purchase of your main residence with a bank financing or in the scope of an investment in rental property (See Pinel Law).
If you are using financing to purchase your accomodation new, you can have the benefit, under certain conditions of the means of financing advantageous via regulated loans and loans helped by the State of local communities:
- The 0% loan
- The Housing Saving Plan
- The Social Ownership Loan
- The 1% Employer Loan
You will also have access to all the loan formulas of the free sector such as bridging loans, in-fine loans, as well as various rates and options of repayments. (See Loans)
The capital gains tax on resale
An investment in real estate is sometimes the process of a wish to turn to good account one's property or to start accumulating durable holdings. From this perspective, real estate remains a safe investment that tends to grow on the long term. New accommodations are all the more susceptible to increase value as it does not require renovation expenses or regulatory upgrading. This advantage is a selling point at the resale of the property and enables to make more significant capital gains on average and long term.