Buy house from construction company

Pro and cons

13.10.2022 2 minuti di lettura

If it’s on your purpose to buy a house from a builder you have multiple options: an existing house or a brand new house that has yet to be built. Let’s go deeper into the pros and cons of buying a house under construction. 

Buy a property “on paper” or ready to be used
You have visited several houses for sale but they all had imperfections, so you decide to contact a construction company to make or buy the house that meets your needs. The contractor can suggest several options, based on the projects he is realizing or those he has concluded.
The buying options from contractor can be:

  • on paper: the purchase of the property takes place when only the project exists on paper or when the construction works are already started. In the project, times, materials, site and expected date of delivery are indicated. When you opt for this choice it is recommended to enter into a contract of sale to secure the right of ownership.  
  • brand new house: the contractor has already ended the construction, its probability was part of a bigger project, but it was not sold during the precedent phase. 


In the first situation, you have the opportunity to customize your future home, agreeing on structural changes or affecting some finishes and materials used. 

Pro and cons
Buying a house is a delicate stage and for every choice you will take there will be pros and cons. If you opt for a new home already completed the disadvantage may be that you can not customize rooms with materials, furniture, finishes and colors, different from those chosen by the company. On the other hand, a number of obligations and possible risks are avoided. 

Indeed, when you buy a house from a builder there may be a possibility that the construction company will fail. To avoid this being reflected on the buyer, the Italian legislation provided for some protections in Decreto Legislativo n.122/2005, which was supplemented by the Codice della crisi d’impresa e dell’insolvenza del Decreto Legislativo n.14/2019, which provide:

  • The signing of a preliminary contract to which it is mandatory to attach a guarantee by the manufacturer;
  • The guarantee cover: must be issued by the bank or an insurance institution. This guarantees that the deposit paid by the purchaser can be returned, by the guarantor, in the event of a company crisis ;
  • Mortgage fractionation: if the property is inside a lot composed of several houses, the builder could apply for a building loan. The mortgage split requires that the total mortgage is divided by each unit. This allows the buyer to take on the mortgage share specific to the chosen property, moreover, protects the buyer from losing the purchased house due to a debt not own. 
  • Ten-year indemnity policy: it is a 10-year policy that the constructor delivers to the buyer during the deed. The policy guarantees the coverage of multiple defects and damages of the property.



Costs
When you buy a home, as well from the constructor, there are some costs and taxes to pay. Let’s simplify:

  • deposit, that has to be protected by a guarantee until the deed;
  • notary fees;
  • mortgage, if needed ;
  • registration tax, mortgage and cadastral tax;
  • payment of VAT:  if the construction has been completed within 5 years the payment is subject to VAT. After 5 years from the completion of the works, the choice to subject the sale to VAT depends on who did the work.


If you are buying your first home, you can use the active benefits. We have already spoken about in those articolo: “The benefit for the under 36” and “ Are you interested in purchasing your first house and have questions?”.
Find out which properties are under construction and all the services recommended by Kaaja, visit the website or call us



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