Investing in a new development: everything you need to know before you get started

Why invest in an off-plan program?

 

Investing in an off-plan program is an attractive opportunity for those looking to build their property portfolio, benefit from tax advantages and secure their investment. Thanks to schemes such as the Pinel Law, LMNP status and reduced notary fees, investing in an off-plan program is becoming increasingly popular, whether you're looking for a first or second home or a rental investment.

In this article, we explain all the advantages and the key steps to make your property project a success.

 

Invest in an off-plan program that meets the latest standards

One of the main advantages of investing in an off-plan program is that it meets modern building standards. New homes have to comply with the latest regulations, particularly in terms of energy efficiency and noise insulation.
So when you invest in a new development, you benefit from:

• Quality materials for greater durability
• The latest environmental and energy standards (RT 2012, RE 2020)
• Greater comfort for residents

This type of property is also attractive to tenants looking for energy-efficient accommodation, making it easier to let and improving returns.

 

Tax advantages thanks to tax exemptions

If you invest in an off-plan rental program, you can benefit from attractive tax incentives. The Pinel Law, for example, offers tax reductions of up to 21% of the amount invested, provided that certain conditions are met (maximum rent, rental period, eligible areas).

Another solution is the LMNP status (Non-professional furnished rental), which allows you to depreciate the property and reduce the tax on the rental income.

Depending on your project, you can optimise your investment and maximise your tax benefits.

 

Investing in an off-plan program, the key to long-term savings

A new home uses less energy and requires less labour than an old one. This means savings on:

• Community fees, which are often lower than for older properties
• Energy bills, thanks to better insulation
• Repair and maintenance costs

What's more, you'll benefit from a ten-year guarantee, which covers any defects in construction for 10 years after delivery of the property.

 

The specific advantages of investing in new build properties

Invest in a home that reflects your image

Buying a new property on a VEFA (Sale in Future State of Completion) basis means you can personalise your property. You can choose from:

• Floor and wall coverings
• The layout of the rooms
• Certain technical options (sockets, home automation, etc.)

This flexibility helps to attract tenants looking for a modern, functional property.

 

Secure investment with manufacturer warranties

Buying from an off-plan program comes with a range of warranties, including:

• Ten-year warranty: covers structural defects
• Biennial guarantee: covers the fittings for 2 years
• Perfect Completion Guarantee: covers any defects reported at the time of handover.

These guarantees reduce your financial risk and give you peace of mind.

 

What about notary fees compared to old houses?

One of the main advantages of buying new is the reduction in notary fees. While these can be as high as 7-8% of the price of an existing property, they are reduced to 2-3% when buying new. This represents a saving of several thousand euros, which reduces the overall cost of your investment in an off-plan program.

 

Tax incentives for investing in an off-plan program

The Pinel Law, a real incentive to invest in new property

The Pinel scheme is an important lever for investors. It offers tax relief of up to €63,000 in return for letting the property for a minimum of 6 years.

Seriously consider LMNP status

LMNP status (Non-professional furnished rental) is an attractive option for those wishing to invest in a new furnished rental property. In particular, it allows you to benefit from lower taxation by reducing the tax on rental income through the depreciation of the property and the deduction of certain expenses such as loan interest and maintenance costs.

This status is particularly suitable for properties in tourist areas or ski resorts where seasonal letting is popular. It offers an attractive return while allowing owners to enjoy their property for part of the year.

 

The key stages of investing in an off-plan program

Define your project and budget

Before you invest, it's important to be clear about your objectives: are you looking to build wealth, generate extra income or benefit from tax relief? Once you've defined your project, work out your budget, taking into account the cost of purchase, any fees and financing.

A personal contribution can be an asset, but it is also possible to obtain a loan for the whole project if you have a good track record.

How a sale on completion works

Buying a VEFA property means buying an off-plan home to be delivered once it has been built. The purchase is made in several stages: signing a reservation contract, paying a deposit, signing the deed of sale at the notary's office, then staggering the payments according to the progress of the work.

Financing your investment in an off-plan program: our advice

Comparing loan offers is essential to get the best deal. Although interest rates have risen, they remain attractive for property investment. Depending on your situation, schemes such as the zero-interest loan (PTZ) may also ease the financial burden, particularly if you are buying your main home.

 

Mistakes to avoid when investing in an off-plan program

One of the most common pitfalls is neglecting the location of the program. A poorly located property, even if it's new, will struggle to increase in value or find tenants. You also need to anticipate rental profitability by studying the market and calculating the rate of return to ensure the investment is viable.

Community fees are another point to keep an eye on, especially for residences that offer services such as a swimming pool or spa, which can add to costs. Finally, it's important to keep an eye on delivery times for VEFA developments, which can sometimes be delayed.

 

Good reasons to invest in an off-plan program in a ski resort 

Ski resorts offer strong potential for rental investment, with sustained demand during the winter season and often stable property values. High altitude accommodation attracts both holidaymakers and second home buyers, making it possible to combine home ownership with seasonal rental.

With LMNP status, it's possible to earn a return on your property while benefiting from tax relief. What's more, some developing resorts offer attractive prospects for long-term capital gains.

 

 

If you're looking to invest in a resort, Collection Chalet offers developments tailored to the needs of investors, combining quality, comfort, strategic location and para-hotel services.

Thinking of investing in the mountains? Discover the opportunities offered by Collection Chalet and bring your project to life with expert support.

 

>> Discover the exclusive off-plan program: Les Chalets Caroline

>> Discover also the tax benefits associated to a second home

 

 

 

C. JAY