Buying a New Build in France: Purchasing Off-Plan

While overseas buyers often dream of renovating an old farmhouse or a French château conversion, it’s long been the preference of French buyers to purchase new homes. As such, France builds more new homes than any other European country, and there’s often plenty of choice for those looking to purchase off-plan. Here’s what you need to know about buying a new build in France.

New Build, Off-Plan, or Self-Build?

There are a number of options for purchasing a new build in France. The first option is to buy a brand-new property that has already been built and is ready to move in. Essentially this is no different to any other French property purchase, aside from the fact that you will be required to pay 20% VAT (TVA) on the property (this is applicable for any house under five years old). Another option is to buy a plot of land and build your own home.

This article looks at the process of purchasing a new build property ‘off-plan’, which means purchasing a new build that has not yet been built or is in the process of being built.

Why Buy a New Build in France: Pros and Cons

Whether you are looking to move to France or rent your property out, there are some obvious advantages to purchasing a new build. New constructions have to adhere to modern building and structural regulations, as well as being more energy-efficient. This not only means being able to move into a brand-new home, but peace of mind over the building’s structural soundness, lower costs on heating, and less general maintenance.

New builds are often located in popular areas, such as urban developments, by the beach, or within tourist regions. All of these things mean that new builds are often easy to rent out, making them a safe bet for French property investments, or second-home owners looking to benefit from seasonal or temporary rentals.

If you’re looking for a rural getaway, you probably shouldn’t pin your hopes on a new build, though. Planning permissions for new builds in countryside regions are rare.

Another plus to buying off-plan is that the notaire’s fees are reduced, typically to around 2-3% of the sale price. Compare this to the average 7-8% fees on a completed new build or older property purchase, and it can be an attractive proposition.

Buying a French Property Off-Plan: Before You Sign

Buying off-plan means that you will purchase the property directly from the property developer, whose job it will be to hire and pay the architects and builders, and bring the project to completion. Inevitably there is some risk involved in this, so it’s important to be very clear about what you are buying, what is included, and the proposed timescale.

When buying off-plan, you probably won’t be able to visit the property—although you should be able to visit the location and see the building or apartment block in its current stage of development. Because of this, it’s imperative to study the plans of the property with a critical eye. Ask as many questions as possible about the property, its boundaries and access, any shared land or amenities, and interior fittings including the kitchen and bathroom.

Be sure you know when the property will be finished and ready to move in. If the property is on a shared development plot, ask the timescale of neighbouring buildings and shared amenities too. You don’t want to move into your new house only to find you are living on a construction site as other buildings are being finished or that the swimming pool you had been promised access too won’t actually be completed until the following year.

Question exactly what is included in the property itself. Will the developer also be adding fittings such as in the kitchen and bathroom? Sometimes this is not included or it is an option available at an additional cost. You may prefer to complete this work yourself in order to have full control over their quality and style, but be sure to account for the extra expense and time.

Consider how much influence you will be able to have over the design and/or fittings of the property. Some off-plan properties allow for an amount of flexibility in the planning; others may not allow any deviation from the original plan, or the costs involved in doing so could be high. It’s important to ask all the essential questions right from the beginning.

Buying a French Property Off-Plan: The Legal Process

Buying an off-plan new build in France follows the same legal procedure for purchasing a French Property, however, there are some key differences in the contracts. As with any property sale or purchase, the notaire is responsible for the sale of off-plan property, but instead of signing a Compromis de Vente, you will sign a vente en l’état futur d’achèvement or VEFA.

This is the first legally binding contract you will sign in the purchase of your new build property, so it’s imperative that you fully understand it. Be sure to request an English translation and consult a legal representative if necessary.

For a new build purchase, the buyer will be asked to sign a ’reservation contract’ (contrat de reservation), where he or she commits to buy the property described in the contract, in the event of the developer offering it for sale. This sets out the details of the property to be built, the estimated price, and the approximate delivery date. Pay particular attention to the details of the building—remember that it is what is listed in the contract and the attached plan that the developer is legally required to follow and not the proposed images or sketches presented in the brochure. The contractual description of the property is usually short; this is why the accuracy of the plan annexed to the contract is so important.

The developer will typically offer the property for sale subject to obtaining the necessary authorisations and to being successful in marketing the properties, i.e. getting enough interest from buyers to make it worthwhile going ahead with the build. There is usually a clause in the contract allowing the developer not to proceed with the sale (with no compensation for the unfortunate buyer) if he does not go ahead with the project because planning permission was not granted or the marketing flopped.

Paying for Your New Build Property

Pay attention also to the price of your new build property, in particular, whether it is a fixed or a provisional price. If it is a provisional price, this is typically subject to restrictions on how much it can change, so be sure you know the highest possible amount.

Payment on new build properties typically takes place in several stages throughout the build process, so you will need to be clear on exactly how much you need to pay and by what date. There are often penalties for missing a payment, but you should also not make the payments until you have received the certificate of completion for that stage of the project.

You will normally be asked to pay a 5% deposit when signing the reservation contract, after which there is be a 7-day cooling-off period of time and you will not be committed to the purchase until this expires.

Completion of Your Off-Plan Property

The final legal step in the purchase of your new build property is the signature of the Acte de Vente (the deed of sale). This can happen at different times for different purchases, so it is important to discuss this with the notaire before signing the initial contact. However, remember that while the legal completion of your purchase may take place a couple of months after the reservation contract is signed, handing over the keys will not take place before the building is finished, and that can take another year or so.

Buying a French Property Off-Plan: Guarantees and Protections

When buying off-plan in France, it is the responsibility of the property developer to make the necessary checks that the property is structurally sound. As the buyer, you benefit from a range of legal guarantees including one that guarantees that the building will be finished in the event that the developer goes bankrupt, and a 10-year guarantee on structural faults.

Your notaire will go over these at length before you sign the deed of sale and it’s important to understand each one. You should also keep details of the developer’s insurer, the policy number, and the conditions in which a claim can be made.

Purchasing a New Build in France: Final Considerations

There are many things to consider when buying a new build in France and it’s highly advised to seek professional advice before moving forward with a purchase. If you’re ready to start your search, head over to our property for sale section.