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Buying property in France? Why you need to know about ‘VEFA’

Have you heard of VEFA? The French real estate term for buying a property off-plan is worth knowing about. Here’s why. 

Buying property in France? Why you need to know about 'VEFA'
How's the view? Access to stunning locations is just one VEFA benefit. Photo: Getty Images

Whether you choose to design a modern villa in the French countryside or buy a new apartment along the French riviera, when it comes to buying real estate in France, it is good to know the ins and outs of VEFA.

First of all, what is VEFA? It’s a term used in French real estate that stands for vente en l’etat futur d’achèvement. It is used to describe buying a property off the plan from a developer, before or during the construction phase but before it is completed.

While the idea of buying off-plan might not be new to you, the purchase process is different from buying a property already built – and in France, it has a number of benefits, including enticing savings to be made for holiday homes. 

In partnership with the French property experts at Leggett Immobilier, The Local shares with you six benefits of VEFA.

1. High protection for buyers

The VEFA market is highly regulated in France and buyers are protected from the outset. “The French laws in this arena are strict, making this one of the safest and most transparent property markets in the world,” says Joanna Leggett from Leggett Immobilier.

Buyers are well-protected throughout the contract stage.

The Contrat de Réservation sets out the purchase price, timeframe of the build, broad specification of the property and outline the structure of payments to be made. Note it is illegal for buyers to be asked for any payments before the Contrat de Réservation is signed. 

Once signed, buyers are asked to pay the deposit – Dépot de Garantie – either two or five percent, which is paid into a client account and cannot be withdrawn by the developer until the sale is completed. Buyers also have a ten-day cooling off period, with the right to a full refund. 

A VEFA contract comes with a number guarantees for the buyer. These include the Garantie de Remboursement, which means you will receive a full refund if the developer defaults on the contract, say for example, if the building’s planning permission was refused. 

The Garantie d’achevement covers issues like bankruptcy, while you will also have guarantees on the actual building work for one year under VEFA law. And you can opt for La responsabilité décennale – a ten year guarantee on all major building work. 

Find out more about the high protection that comes with buying VEFA. Legget Immobilier agents can help you every step of the way

2. Location, location

Developers have money, they have buying power, they have experience and they have local knowledge. All of these elements benefit the buyers of VEFA properties as developers want to build in prime locations. It’s usually the developers who are notified when those highly-sought-after locations go on the market. 

So if you want that unreal position beside a ski resort in the Alps, or conveniently close to the Paris metro, or perhaps with the most idyllic sea views over the Riviera, it’s likely a developer has a property planned for you. 

Buying a VEFA property could be a good way to own your own piece of the French Alps. Photo: Getty Images

3. Financial incentives

There are a couple of enticing financial incentives with a VEFA property purchase. When buying your dream French real estate, it is the notaire’s role to ensure everything complies with French property law. With VEFA, the notaire and legal fees are reduced so that they only add a maximum of three percent to the total price. For other properties this amount is seven to eight percent. 

Another value-add is to do with VAT. As VEFA refers to a new property, the total price includes 20 percent VAT. But if you rent out the property, this amount may be reimbursed. With this option, you can still enjoy the property yourself, it just cannot be your primary residence. There are some other rules too, like it must be furnished and rented on a short-term basis.

New-builds tend to make an excellent long-term investment, explain the experts at Leggett Immobilier. This is in part because of the many financial incentives – so you get an ideal combination of value and quality property.

Tap into local knowledge and a black book of contacts when you’re buying French real estate by talking to Leggett Immobilier

4. It’s new, and it’s all yours

Many of you will, I’m sure, agree that the idea of having your own slice of French real estate is pinch-yourself exciting. But imagine if that property was completely brand new. No rickety gates to fix, old wallpaper to painstakingly scrape away, or decades-old plumbing oddities to deal with. Heaven!

Buying a property before it’s been built also quite often means you can add your own personal touches as it’s being constructed. The options will vary from development to development but this typically means having your own say on the fixtures, fittings, colours and surfaces used in your kitchen and bathroom, decorations and sometimes even the furnishings. 

5. Energy efficiency: a green dream

It’s more likely that new-builds have a higher energy efficiency, so you can rest your head in your luxurious new villa or apartment knowing that you are doing your bit to save the planet. 

Typically, newer builds take in passive design principles and with modern building practices and French regulations, owners of newly built properties also enjoy lower running costs compared to those of an older property. A win for both you and the environment. 

6. Set prices

Depending on the country you are in, buying a property can be a real rollercoaster of emotions. Viewing a property, falling in love with it, and then the back and forth of negotiating the price – it can be exhausting to get to the contract stage! 

With VEFA, once you’ve found your ideal place, there are no anxiety-inducing price negotiations or auctions to attend. Buying off-plan from a developer, there is usually little to no room for price changes, so you basically know what the cost will be, straight up. 

Sold on the French property market dream? According to Leggett, your best first steps are to work out the area you want to buy in, and your budget. Then, you can speak to a local real estate agent, like the experts at Leggett Immobilier who have sold many VEFAs. They will help you find suitable properties, explaining the pros and cons in line with what you’re after along the way. 

Make finding your French dream home easy. Watch Leggett Immobilier’s new video,

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PROPERTY

Explained: France’s new property renovation grant

Ma Prime Logement Décent, which came into effect on January 1st, offers financial assistance to property owners for major home improvements.

Explained: France’s new property renovation grant

The French government has several financial assistance schemes that are open to property owners to help finance renovation projects, especially those aimed at making homes more energy efficient.

GUIDE: French property grants you might be eligible for

Now a new one has been launched, aimed at property that is in a dilapidated and run-down state. The idea is both the ease the housing shortage that is a problem in several French cities and ensure that people are living in decent conditions. 

Launched on January 1, 2024, Ma Prime Logement Décent (My Decent Housing Bonus) has enabled property owners to obtain financial assistance for renovation work on run-down housing. 

Homeowners on a modest income can apply for the Ma Prime Logement Décent financial aid, which is – in certain cases – up to 80 percent of the total spent, up to a maximum of €70,000.

The scheme is open to people who own their own home and people who own a property that they rent out, but is not available to second home owners. You do not need to be a French national to apply, but you must be resident in France, have a French tax number and complete the annual French income tax declaration.

The aid can only be used for work to remedy a proven health or safety risk at a property, such as:

  • unsanitary conditions;
  • a risk of lead exposure;
  • significant deterioration to a property’s fabric.

Work may include :

  • renovating an electrical or gas network;
  • replacing a roof;
  • reinforcing the foundations.

Who’s eligible?

Owner-occupiers on ‘modest’ or ‘very modest’ incomes whose main residence requires renovation can apply for the Ma Prime Logement Décent aid, if:

  • the property was built more than 15 years ago;
  • the work is carried out by qualified professionals (except very particular cases);
  • your home has been assessed by a qualified assessor.

After work has been completed, it must achieve a minimum energy efficiency rating of E.

READ ALSO What do energy ratings mean for French property owners?

Owners renting out their property can apply for this aid in the following circumstances.

  • The unfurnished property must be rented to a low-income tenant, who cannot be a family member, or a member of the landlord’s household for tax purposes;
  • The property has a capped rent – ceilings are defined annually by commune or arrondissement;
  • It has at least a level D energy efficiency rating after the work has been carried out.

READ ALSO GUIDE: French property grants you might be eligible for

How much is the help worth?

When you use Ma Prime Logement Décent as an owner-occupier, you’ll be reimbursed for :

  • 80 percent of the cost of the work if you’re part of a ‘very low income’ household (rising to 90 percent if the work also means that your home is no longer a so-called heat sieve);
  • 60 percent of the cost of the work if you are part of a ‘low-income’ household ( rising to 70 percent if the work also prevents the home from becoming a so-called heat sieve).

In both cases, the total cost of the work must not exceed €70,000.

Owners renting out their property can benefit from 35 percent of the cost of your renovation work.

An online simulator can help property owners check whether the work qualifies for the Ma Prime Logement Décent scheme.

You use terms like ‘very low income’ and ‘low income’. What does that mean?

Your revenus fiscaux de référence (RFR) are important. You’ll see the figure on your annual tax assessment – it’s basically an amount calculated by the tax administration from the total income of a tax household intended to reflect the financial resources of that household.

It helps decide what social assistance you may be entitled to.

READ ALSO MaPrimeRenov: How France’s property renovation grants will change in 2024

In the greater Paris Île-de-France region, a single person living on their own is considered to be ‘very low income’ if their RFR is €23,541 or less (€17,009 for the rest of the country), and low income if it’s €28,657 or less (€21,805 outside Île-de-France).

The scale rises to €55,427 for a very low income household of five in Île-de-France (€40,002 elsewhere); and €67,473 for a low income household of five (€51,281 elsewhere).

Okay, I think I qualify. How do I apply?

The first thing to do is create an personal account on the Agence nationale de l’habitat website

You will be directed to an information point, where you can choose an adviser for your renovation project, who will help put together your application.

Once the application has been approved and the work completed, funds will be released to cover the cost.

READ ALSO French home renovations: What grants are available to the elderly and the disabled?

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