Most off plan sales in France take place in the Alps, Paris and Cote d’Azur and are often bought as investments. They are known as Vente en l’état futur d’achèvement or VEFA.
How does the newbuild market in France work?
The new build market in France is popular and President Macron sees it as important to the economy. In 2017, The Ministry of Territorial Cohesion announced a raft of measures to help make the sector more attractive – both in terms of the buying process and its financial attractiveness.
Some buyers purchase new builds for personal use and some buy as pure investments. The Loi Pinel offers many tax advantages if you are a French resident.
The beauty of buying off plan is that you will be able to choose a property that suits 21st century living – bright, open spaces, fibre optic cabling & lightning quick broadband, energy efficient housing and garaging for electric vehicles.
The VEFA market in France is highly regulated, with protections in place to protect the purchaser throughout the transaction and beyond. Set out below is a brief guide as to the process you will go through when buying a new build property.
The good news is that your purchase comes with certain guarantees:
- La garantie de livraison (that it will be delivered on time, within specification and on budget)
- La garantie de parfait achèvement (covers all major issues, that need immediate attention, for the year after delivery)
- La garantie biennale (covers minor snagging for two years after delivery)
- La garantie décennale (covers structural issues for 10 years)
When buying off plan it is usually a two stage process. You begin by signing a preliminary contrat de réservation – be warned that whilst this will contain important information such as plans, plot sizes, completion dates and finishes it will be the second, VEFA, contract that governs the rules of the sale.
This VEFA contract will have been drawn up by the Notaire and it will include details of what is included in the sale, the descriptif détaillé.
The VEFA contract will also include the set of the rules that will apply on the development. For instance, use of the communal areas, business use of the property, and fully itemised service charges – this is called the Cahier des Charges.
This second contract is lengthy, complicated and in French – by law it must be given to you at least one month before your signature is expected
You should be aware that the contract is unlikely to specify an exact date for “delivery” of the scheme – most often it would give the year and approximate time (ie 3rdquarter, 2018).