Off-Plan French Property

Buying off-plan property in France allows you to buy into new-build developments in desirable locations at prices of up to 20% off their market value on completion. This isn’t bad capital growth for an 18 or 24 months’ build time which also allows you to spread the financial burden with staged payments!

The option of buying a new ‘lock-up and leave’ apartment is perfect for investors who don’t want to spend their holidays carrying out DIY and garden maintenance.

To secure an off-plan property you will sign a ‘contrat de réservation’ and pay a reservation deposit of between 2% and 5% (this is 10% for a re-sale property). As with re-sale properties you have a seven-day cooling-off period during which you can change your mind and get your deposit back. A property less than 5 years old also means you pay lower notaire’s fees on the conveyancing of between 2.5% and 4% (between 6% and 10% for resale).

If you choose to buy a leaseback property off-plan then you lease your new freehold property to a holiday company which takes care of lettings and maintenance, provides you with guaranteed income and (if you wish) alots you some personal use for the duration of the lease – typically 9–11 years. The French government even refunds you the 19.6% VAT! You are, however, locked into this arrangement for the term of the lease so if you want to enjoy your holiday home whenever the mood takes you (and arrange any lettings and maintenance yourself) then a straight-forward freehold purchase is best.

The French new-build system is strictly regulated and the purchaser has complete protection under the law. For example, your deposit is not paid directly to the developer but to the notaire - or into a secure escrow account lodged with a bank (‘un compte sequestre’).

The developer can neither access your deposit nor ask for the first stage payment until the ‘acte de vente’ (the deed of sale) is signed; and you don’t sign this until it includes a financial bonding policy (a bank guarantee that the development will be completed and to the advertised standard) and an insurance policy for the development. This insurance will cover a 10 year structural guarantee, a 2 year fixtures and fittings guarantee and a 1 year perfect completion guarantee which covers the snagging list.

You are not obliged to use the developer’s notaire, you can choose your own English speaking notaire at no extra cost (the two notaires share the fixed fee) or for added peace of mind engage a firm of English solicitors specialising in French property.

On handover, a representative of the developer will accompany you on an inspection of your property and make a snagging list with you. You then have a further 30 days to notify the developer by recorded delivery if you want to add any items to the list.

Throughout the build each stage is checked by an independent architect or surveyor and an ‘attestation’ (certificate) is issued if everything is in order. Developers are not allowed to request a stage payment until they are in possession of this certificate.

• Stage Payments: ‘How much do I pay and when?’
• Dépôt de garantie (deposit): 5%
• Ouverture de chantier (works start): 25%
• Achèvement des fondations (foundations laid): 5%
• Plancher bas rezdechaussée (ground floor stage): 30%
• Mis hors d’eau (roof on): 5%
• Menuiserie extérieures posées (second fixing): 20%
• Achèvement des travaux (works completed): 5%
• Remise des clés (handing over keys when snagging complete): 5%

French Property Centre recommends that you buy only through a reputable developer who comes not only with recommendations but with completed work that you can inspect. Visit the site as often as you can during the build – don’t rely on models or artists’ impressions – and make sure you’re happy with each phase before releasing payments.