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to pay the deposit – Dépot de Garantie – either two or five percent, which is paid into a client account and cannot be withdrawn by the developer until the sale is completed.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, ‘Your complete guide to buying off-plan in France’ 

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So you want to Airbnb your French property during the Olympics?

The 2023 Rugby World Cup in France and the 2024 Paris Olympics have got many people wondering about whether they could earn some extra cash renting out their homes to sports-mad tourists - but it's important not to fall foul or local rules on registration and taxes.

So you want to Airbnb your French property during the Olympics?

There’s no doubt that both big sporting events have the potential to be a holiday-let money-spinner – especially the Olympics when 10 million people are expected to come to Paris during the Games.

If you own property in France – either a main home or second home – you are entitled to rent it out on a short let – whether that is arranged directly or via a rental platform such as Airbnb. But there are things you should know – such as whether you need to register with local authorities, and pay tax on your earnings.

Register your home with local authorities

Most towns and cities in France now have a registration procedure for any person who wants to rent out an entire property as furnished accommodation for tourists (as opposed to renting your spare room while you remain in the property).

Under French law, homeowners can sub-let their main residence as a short-term let for a maximum of 120 days a year and must seek permission from the local authority to do so. 

So anyone wishing to list their French property on Airbnb will likely need to first register it with the authorities and include it on your Airbnb listing before you start hosting – check with your mairie for the exact requirements in your area.

This procedure is free and only takes a few minutes to complete

NB: If you’re a tenant, you will need written permission from your landlord if you plan to sublet your rented property, otherwise, you’ll get into legal bother and could face a big fine, as well as being made to hand over any earnings to your landlord.

If you’re renting your property in Paris, you can’t legally sublet at all – this doesn’t mean that people don’t do it, of course, but be aware that if you’re renting something as a sublet you have very few rights since it’s likely an unofficial sublet. 

Likewise, if you live in social housing, furnished tourist rental is strictly forbidden: as well as financial penalties, you can have your rental contract terminated. So, don’t do it.

Second homes

A second home for Airbnb-registration purposes is classed a place where you live for less than four months a year. You can rent it all year long provided you’ve declared your rental activity to the city. Some cities and neighbourhoods require permission to use your secondary home as a tourist rental. You can get permission for change of use from your local city hall.

Some areas with a housing shortage have stricter local rules – for example it is illegal to offer a second home in Paris for rent on the popular site. Do so, and you risk a fine of €50,000 per room.

Renting a room

If you intend to rent out a room in your property while you remain on site, this is not considered “furnished tourist accommodation”.

You can therefore rent a room in your main residence without any time limit. But you should still register it with local authorities.

Local regulations

In fact, it is important to be aware of local rules, which may add additional layers of bureaucracy – Paris is particularly strict (Airbnb said it automatically limits rentals on its site to 120 days in central Paris and the government has announced plans to fine the site for publishing listings not properly registered with the local authorities). 

READ ALSO Paris ‘rent police’ crack down on illegal holiday lets in city

The Airbnb website has a handy breakdown of the rules for numerous French towns and cities, with links to local regulations here.


Taxable earnings

Income from renting property on Airbnb may be declarable and taxable as micro-BIC income – which means you’ll need to properly register your Airbnb ‘business’ and get a Siret number. Handily, Airbnb offers a guide to what taxes you need to consider if renting out a property in France. It’s here (pdf).

As a general rule, income from holiday letting your property should be declared for tax, but income from occasionally renting out part of your main residence is exempt from tax and does not have to be declared as long as the amount earned is less than €760 per year.

Don’t think, however, you can get away with not declaring your income. Airbnb sends rental details directly to the taxman, which will be cross-checked against your declarations. 

If you’re a second-home owner and live in another country you will likely not make the annual income tax declaration in France – however, if you start to earn money by Airbnb renting your property this means that you now have income in France, and may therefore have to begin making annual tax declarations in France.

READ ALSO Who has to fill in the annual French income tax declaration

Taxe de séjour

Income tax is not the end of it. Numerous French cities have an agreement with Airbnb to collect the tourist tax – taxe de séjour – which means that Airbnb properties in the capital are now classed under the rental category of furnished lets or meublés touristiques non-classés

That, in turn, means that Airbnb adds up to €4.40 per person per night to the cost of a stay. Taxe de séjour levels for towns and cities across France are available here, but this tax is dealt with entirely by Airbnb.

Added tax on second homes

Many areas popular with tourists are suffering from a housing shortage for locals. In a bid to combat this, a number of communes have taken advantage of a law that allows them to impose a surtaxe de la taxe d’habitation which can amount to an extra 60 percent on part of the tax.

READ ALSO Local authorities in France get power to crack down on Airbnb rentals