Why buy a new house?

Buying a home is without a doubt one of the biggest financial decisions in life. It needs to be an informed process to find what best suits your needs. Several important questions will be part of the decision-making process, including one in particular: is it a better investment to buy a used house or to buy a new one?

Here are some advantages of buying a new home:

1. Guarantee Plan

When buying a new home, you generally benefit from a warranty plan providing protection covering the entire construction period in addition to that following delivery. A directory exists to check if your builder is listed there.

Take, for example, the residential construction guarantee plan of the GCR, which is a "non-profit organization (NPO), neutral and independent, whose mandate is to administer the guarantee plan for new residential buildings for the entire territory of Quebec.” Its mission is to “protect the interests of buyers of new homes and condominiums, reduce the number of claims by focusing on improving the quality of buildings and ensuring sound management of the risks associated with the coverage offered.”

During construction, the plan provides deposit protection of up to $50,000. In the event of major delivery delays, the plan provides an amount, offering up to $6,000, for moving and temporary relocation costs.

Following delivery, the plan will protect you against deficiencies and other construction-related inconveniences, offering up to $300,000 for a single-family home.

The GCR will continue to support you for a period of:

1 year from delivery for deficiencies (e.g. cracked ceramic floor)

3 years for hidden defects (for example, if the air exchanger breaks down)

5 years for defects related to the construction and the terrain (for example cracks in the foundations)

Note that if you decide to sell, the warranty is transferable!

2. No worries about renovations and repairs

When you buy a new property, it will be up to date. Expect not to have to deal with tedious and expensive work for many years. Some examples of major works that need doing in older homes are: redoing the kitchen, bathrooms, electrical circuits, ventilation, roofing and foundations. You could then save thousands of dollars and hours of therapy!

With regard to construction, building codes have changed over the years. When buying a new home, materials and methods must comply with code standards and meet standards to provide better safety and well-being.

3. Customization

If you arrive early enough in the process and buy during the design stage, developers often give the choice to make certain modifications to the initial plans. It is possible to personalize it to your liking, for example, to adjust certain room dimensions and obtain a larger master bedroom.

You can also be accompanied by a designer who will guide you through the selection of finishes. This service often includes the choice of some colour schemes for cabinets, ceramics and floors. It is also possible to add certain improvements to the basic assets, for example, heated floors in the bathrooms, pre-wiring for the addition of a home automation system, additional lighting or even the addition of an extra such as a gas fireplace. It all depends on the flexibility of the developer and your budget.

4. Energy savings

New homes are frequently built to meet energy-efficient standards. Some certification programs exist such as LEED (Leadership in energy and environmental design) and NovoClimat. These require thermal standards to minimize heat loss and avoid overheating in summer. It is also required to provide “more airtight and efficient windows and efficient heating services.”

It is also possible to save and increase energy efficiency by having a more efficient air exchanger, better insulation that minimizes heat loss in winter and overheating in summer, more optimal water management and checks to prevent water leaks.

These houses have the advantage of making you realize great savings while improving the quality of the environment.

You will be able to benefit from specialized and advantageous financial services such as the Green Homes Program from Desjardins when buying or renovating an eco-friendly house.

5. You might be able to negotiate with the developer

There is another possible advantage which is the potential for negotiation with the developer. When you buy a new house directly from a developer, you must remember that this company has multiple contacts and can probably obtain good prices for building materials. You can therefore negotiate, for example, the inclusion of appliances or a loan to buy them, some extra add-ons such as a kitchen backsplash, payment of notary fees, etc.

6. No competition between buyers

Finally, when you buy a new home, you don't have to compete with other buyers for the same reason. This makes the process less stressful than making an offer to purchase against other potential buyers. At the same time, you avoid any possible overbidding. You pay exactly the amount you agreed to with the builder.

Tax Refund Tip

When buying a new home, the displayed price is always established before taxes. The GST and QST will have to be paid in addition to the purchase price of your house. However, it is possible to benefit from a refund through a government program.

This is calculated at the time of purchase; you can get a maximum of $6,300 back for the GST paid on an amount under $350,000. For a price between $350,000 and $450,000, expect to receive a refund calculated by subtracting the purchase price from $450,000 and dividing the result by 100,000.

For the QST, the refund can go up to $9,975 for a purchase price of less than $200,000. If the purchase is between $200,000 and $300,000, the refund is calculated by the following equation: ($300,000 - purchase price) / 100,000.

Note that according to Revenu Québec:

“Since April 19, 2021, several individual co-owners of a new dwelling may all be entitled to a refund of the GST and QST paid, provided that this dwelling is built to serve as the primary residence of one of them or of someone close to one of them.

This measure applies to construction and major renovations largely completed after April 19, 2021.”

In short, buying a new home represents peace of mind, customization, energy savings and up-to-date design. The important thing is to find out about the builder and make sure all construction is up to building codes. Knowing that you are the first owner of your home is a very satisfying feeling. Don't wait any longer, and be the first to live in the house of your dreams!