7 Economic Benefits of Buying a Brand-New Home
You are looking for the ideal house but you do not necessarily want to spend hours upon hours making renovations . . . Are you interested by a brand new "turnkey" house? By selecting your future house wisely, you could enjoy many economic benefits...
1. Store your tools, no renovations are required!
When you buy a custom-built house usually you can customize the finishing. Do you want high-density wood for your floor, an exotic type of molding or to add a fireplace?
When you are about to choose the characteristics of your dream house, it is important that you ask the costs of all your requests. To be satisfied, it is advised to validate what is the net area of the house with the promoter and also the planned height of the ceiling once the plumbing, the electrical wires and the floor will be installed.
By choosing materials and accessories that you like, you avoid having to spend more money for costly renovations in the near future.
2. Guarantee Plan
The buyer of a new home that is accredited by the Régie du bâtiment du Québec (RBQ) can benefit from the Guarantee plan for new residential buildings. This protection covers, for example, the carrying costs of the buyer or the storage costs of its possessions if the project is slightly behind schedule.
Furthermore, if the buyer notices during the first five years any construction defect, the promoter is required do the necessary repairs. The case is then managed by the Garantie de construction résidentielle (GCR).
In order to favor a positive purchase experience, it is recommended to make sure, before signing the agreement, that the promoter has a good reputation.
Discover the eligibility criteria of the guarantee plan and other important characteristics in this article.
3. Energy Saving
New houses usually offer a good energy efficiency thanks to the modern norms and the use of new materials during construction. It translates in smaller hydro bills.
Furthermore, the homes built with the Novoclimat certification (buildings that are indeed more expensive to buy) pay for themselves quickly since the electricity costs are reduced on average by 20%. A few programs give access to financial aid. The website of the Ministère de l'Énergie et des Ressources naturelles explains everything in detail.
4. Ownership access
Thanks to some ownership access programs, many first-time new-home buyers can realize their dream of becoming owners without spending a huge amount on a down payment.
For example, Accès Condo (set up by the Société d'habitation et de dévelopmment de Montréal - SHDM) allows buyers to benefit from a purchase credit of 10% of the value of the new home that will be used for the down payment on condition that they provide $ 1,000 of their own money. Please note that this 10% and an additional 10% of the appreciation must be given back to the SHDM when the condo is sold.
As for Accès Propritété (set up by Construgep in collaboration with the Canada Mortgage and Housing Corporation - CMHC), the down payment of the buyer is $ 5,000. This private program offers in counterpart 5% of the value of the building as a down payment and when selling or refinancing a condo the owner must refund this amount plus 5% of the appreciation.
5. Tax refunds
Here is some good news for new-house buyers: the Government of Quebec offers to refund a portion of the taxes, 50% of Quebec sales tax (up to $ 9,804) and 36% of the goods and services tax (up to $ 6,300).
Financial assistance from the municipal level could also enchant many buyers. For example, the City of Montreal will refund, amongst others, the real property transfer tax as part of the purchase of a new house. Some conditions may apply. The amounts vary depending on the size of the house, the occupancy and the purchase price.
6. Long live promotions!
The time for the buyer's market is now. With many new unsold properties, promoters rely on creative strategies to attract new buyers. You could, for example, get free air conditioning or even free indoor parking.
Offers vary from one promoter to the next and sometime these offers are not advertised. By contacting the promoters directly, you will be able to discover interesting offers and maybe even save thousands of dollars.
Click here for a few examples of promotions for new houses and condos.
7. Negotiate like a pro
A little secret: if the newly built house is available, the contractor may want to sell quickly if they have to pay important fees.
The situation is also in the favor of the buyer when the contractor has almost reached the 40% to 50% mark of pre-sold units, as it is usually the quota requested by banks to obtain financing in order to finalize the housing project.
If you are well prepared, you could get up to 15% off on a new house.
In order to negotiate the price of your dream house or condo and to benefit fully from the financial advantages, please read these advices by Felix Cotte, a real-estate expert.
Stock images: Shutterstock
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