New property guarantees

In France, there are a number of legal guarantees for purchasers of new property, which mean that you can buy your new home with complete peace of mind.

Reimbursement or completion guarantee

If a developer is unable to complete a project, you are entitled to recover any deposits and progress payments. Once work has begun, you can be sure that construction will be completed.

At that point, the seller and the different parties inspect the completed building or home, then it is delivered to the buyer. During this process you have an opportunity to thoroughly inspect your home and make certain that all work conforms to the contract.

Following this process, you are covered by four important legal guarantees:

Guarantee against visible (obvious) defects

This guarantee covers defects that are identified either during the delivery process or within one month after delivery. If any failure in workmanship is identified when the keys are handed over, making the building unlivable, you are entitled to withhold the outstanding 5% of the total price due until the problem is resolved. In most cases the developer agrees to remedy all defects as quickly as possible. The company responsible for executing the work will ask you to sign a discharge once the problems have been corrected.

Guarantee of completion

This mandatory guarantee requires the developer or the builder to repair any defects that affect fixtures and facilities that are not an integral part of the building structure. It runs for one year after delivery.

Two-year guarantee of good working order

This two-year guarantee covers defects involving elements that are not an integral part of the basic structure (or “shell”), such as radiators, shutters, sanitary installations, etc., which are not covered by the ten-year guarantee.

Ten-year guarantee

During the ten years from completion, this guarantee covers all defects that compromise the solidity of the building or make it unfit for living.

Official quality labels for peace of mind

Qualitel Label

Qualitel is a performance label certifying that new buildings meet certain standards regarding the quality of the plumbing, electrical fixtures, durability of roofs and facades, soundproofing, summer insulation and projected heating and hot water costs.

Promotelec Label

The Promotelec label guarantees that your electrical installation meets quality, performance and safety standards. This covers electrical fixtures, heating, electric hot water heaters, insulation and ventilation.

Green Labels

Habitat & Environnement is a label certifying that a new building will have minimal environmental impact throughout its lifecycle. To earn it, developers must begin by ensuring that their construction is integrated with the surrounding natural habitat and mitigate disamenities from the construction work, by effectively managing waste, respecting the community and keeping neighbors informed. The program is assessed according to several criteria: energy efficiency, choice of environmentally sensitive materials, water saving fixtures, efficient soundproofing and insulation, and features that promote good environmental practices by residents, such as selective waste sorting.

HQE (High Quality Environmental) is an initiative that promotes this same environmentally-friendly approach to building. It is not a standard or label, but denotes “green” property developments that efficiently manage their environmental footprint. Although developers express concerns regarding the added cost of environmental quality in a market where prices are already extremely high, more and more of them are willing to embrace this type of initiative. This reflects the growing importance homebuyers place on environmental issues, especially saving energy and optimizing water use.

The HPE (High Energy Performance) label expresses a new building’s compliance with French energy-use legislation. It is awarded to buildings that not only deliver thermal efficiency but are also certified for the safety, durability and operating efficiency of their heating, hot water, air-conditioning and lighting systems, as well as their overall quality.

The label currently has two levels:
- The HPE 2005 « High Energy Performance » label designates standard energy use that is 10% lower than the regulatory benchmark.
- The THPE 2005 « Very High Energy Performance » label designates standard energy use that is 20% lower than the regulatory benchmark.

Designed to match your lifestyle

The interior of your apartment or house expresses who you are, with decoration that reflects your personality. That’s why one of our top priorities is to let you personalize your new home to perfectly match your wants and tastes.
Our pioneering showroom concept proposes a vast choice of design options. From classic to contemporary or trendy, you’ll find exactly the style that transforms an apartment or house into the home of your dreams.

Stock up on ideas

The price of your house or apartment includes an extensive range of contractual interior decoration services in such areas as flooring, wall coverings, ceramic tiles and more. A visit to our showrooms is essential to discover the exciting choice of available materials and colors.

We also propose a unique range of additional services to give you a selection of distinctive decorating ideas. Better still, if you quickly decide on your personalized design package we can bundle the cost into your purchase price, so that it is covered by the same financing plan.

Visit our showrooms

When you purchase property in France you have to pay a variety of transfer taxes and fees, generally known as “frais de notaire.” These transfer costs include:
- The notaire’s fees.
- Expenses paid by the notaire on your behalf for the land registry, surveyor, etc.
- Taxes and duties.
The notaire’s fees, which are set by law and based on the total purchase price including VAT, are the same for new or existing properties. This is not the case for taxes, however, which vary depending on the type of acquisition and are lower for new property.

This means that transfer costs are also lower, representing just 2 to 3% of the transaction price, compared with 7 to 8% for existing property.

The buyer must also pay 19.6% value-added tax, which is included in the sale price. However, under some conditions the acquisition is eligible for a lower 5.5% VAT Find out more

Property tax exemptions

Individuals or households that purchase new housing off-plan (VEFA) are legally exempt from the property tax for two years starting January 1st the year after construction has been completed. When you receive your keys you need to ask for the “H2 form,” which you should send to your tax office. Be aware that this exemption is not automatic and that local and regional governments can decide to apply either total or partial waiver of the tax. Don’t forget to ask to find out exactly what the local rules are.

Preferential financing terms

The French government has a variety of incentive programs that entitle qualified homebuyers to loans at lower rates than conventional loans. You should check to see if you are eligible for one of these subsidized loans.

Interest-free loans

One of the most advantageous and widely known types of preferential financing is called “Prêt à taux 0%,” or interest-free loan. The French state subsidizes these loans to enable people to finance their primary residence. Eligibility depends on your income, your family situation and the location of the property

Find out more about interest-free loans

Subsidized « social » loans

You can also apply for a subsidized type of loan called prêt conventionné (PC), which are not subject to any income thresholds or caps on the price per square meter. The rates are comparable to market rates. These “PC” loans make you eligible for a housing benefit called Aide personnalisée au logement (APL), which is subject to income thresholds. However, if you qualify, you can apply the APL against your loan payments. In addition, the cost of the bank guarantee or mortgage is lower, since transfer costs are lower for these loans compared with conventional loans.

Employer loans

If you work in a company with ten or more employees you have access to an employer loan called prêt 1% logement. While the amounts are limited (€17,700 maximum), the rates are very low (1.5%, not including insurance and guarantees), making this an option that you should definitely explore. Other subsidized lending programs are available to government employees, or provided via regional government agencies, or the family benefits agency (Caisse d’allocations familiales), for example. Don’t forget possible family loans either, which should be notarized and repaid to avoid being qualified by French tax authorities as undeclared gifts.

Tax advantaged loans for low-income rentals

Individual investors and investment vehicles can finance acquisitions using a tax advantaged loan for low-income rental housing called a prêt locatif social (PLS). In addition to tax advantages these loans have attractive rates (see section on tax incentives to encourage property investment in France).
The variable rates on these loans are indexed to the interest rate for Livret A savings accounts. The loan term is limited to 30 years, but there is no minimum regulatory duration.
These loans can be used to finance 100% of new properties, with a minimum of 50% of the total transaction price, including 5.5% VAT. The bank that grants the PLS loan is not allowed to offer any supplementary financing.
There is a ceiling on administrative expenses for arranging these loans:
- €700 for individual lenders
- 1% of the projected cost price for acquisitions made through investment vehicles.

Tax incentives to encourage property investment

Investors who buy new properties can take advantage of several French tax incentive systems designed to increase the stock of private-sector rental properties while ensuring affordable housing for low-income families by capping rents. The two main systems are called « Robien Recentré » and « Borloo ».
There are also several other tax incentive systems for new properties that are worth examining, including:

- Location en Meublé Professionnel (LMP) – (Tax advantaged furnished property rentals by a company)
- Location en Meublé non Professionnel (LMNP) (Tax advantaged furnished property rentals by an individual)
- « Le Prêt locatif social » (PLS) (tax advantaged loans for low-income rental housing).

Find out more about tax incentives for the purchase of new rental properties.