Real Estate: Buying or Building?

Anyone who wants to own property immediately asks the question: should I buy or build? Here are a few things to help you decide.

Note: building requires finding a plot of land first, and this creates additional difficulties. If you want a specific location, you should ask around and ensure that land is available within the defined area. 

Buying or building: tax benefits of building

The person who builds can benefit from tax advantages:

– exemption from property tax for 2 years after completion of the work, starting on 1 January of the year following the year in which the new home is completed;

– exemption from property tax for 5 years if the construction complies with specific standards (energy performance level higher than that imposed by current legislation).

Advantages of buying vs. building

The choice between old and new housing

By definition, buying allows you to acquire both old and new homes. On the other hand, building implies that you will necessarily live in a new home. However, old houses are sometimes more solid than new ones, not to mention the charm and cachet (parquet flooring, mouldings, fireplaces, beams, half-timbering, stone facades, etc.). But it also depends on the price you can afford.

You should not forget that old buildings sometimes need to be renovated or brought up to standard. Of course, renovation work can benefit from certain forms of aid (tax credits, for example). However, this work also entails additional costs and delays for living in the property. It is advisable to read all the diagnostic reports carefully and to seek the assistance of qualified professionals.

Choosing the right builder

Building a new house requires choosing the right builder. It is not uncommon for problems to arise, such as delays, defects or cost overruns.

It is crucial to ensure that the company building the house will not go bankrupt or out of business.

Buying or building: advantages and disadvantages in everyday life

The choice to build or buy will have implications for day-to-day life later on:

– By definition, a house, requiring more maintenance than a flat (cleaning, roof maintenance, basement maintenance, etc.).

– Buying a flat implies that you will be living in a block of flats, with all the inconveniences that this can entail. Conversely, the house is individual. It is advisable to check the soundproofing and ensure that your home is far enough away from the neighbours to ensure your privacy.

– Owning a flat means that you are simply a co-owner of the whole building, along with other co-owners. Some co-owners may have a different opinion from yours. As some decisions must be voted on unanimously, it is advisable to find a compromise so as not to block the functioning of the co-ownership. On the other hand, the owner of a single-family home does what he wants in his own home and does not have to make concessions to a third party. He is the master of the premises.

Living in a block of flats can have a particular advantage: sharing charges with the other co-owners—for example, the presence of a caretaker to secure your home in your absence. 

Local taxes will not necessarily be the same for a house as for a flat, regardless of the exemptions you may initially benefit from.

– Depending on whether you want to live in the city or the country, the question of whether to buy or build is not the same. If you want a lot of space, building in the country is the best solution. If you prefer the old charm, buying a house in the city centre is the best solution. It all depends on your budget, your wishes and the opportunities available.

Good to know: the presence of many companies in your municipality helps to balance your local taxes. In the opposite case, it is possible that your municipality benefits from an equalization scheme with other towns in your department to balance your contribution.

Please note: notary fees are often higher for old than for new properties.