Renovate vs new build: the full cost calculation

Renovate vs new build: the real cost is not just €/m²

Choosing between an old flat to renovate and a turnkey new build often looks simple: the old place is 20–35% cheaper per m² in many European cities. But to decide between renovate vs new buildtotal cost: purchase price, renovation budget (montant_travaux), property tax (montant_fn), financing, maintenance, and even the alternative of buy or rent over the same period.

This article walks through a full calculation with numbers, using the key parameters of the buy-or-rent.net / acheter-ou-louer.com simulator: especially montant_travaux (renovation cost) and montant_fn (property tax), but also loan rate, inflation, tax revaluation and investment returns if you stay a tenant.

1. Old to renovate vs new build: what really changes in the budget

1.1. Asking price vs “real” price

Take a 65 m² 2‑bed in a major city:

• Old to renovate: €4,000/m² → €260,000
• New build: €5,200/m² → €338,000

On the ad, the old flat is €78,000 cheaper. But you must add:

• Notary fees: 7–8% on existing property, 2–3% on new build
• Renovation budget (montant_travaux) in the old flat: cosmetic or deep energy retrofit?
• Agency fees: typically 3–5% of the price, sometimes included in the ad

Quick example:

• Old: €260,000 + 8% notary (€20,800) = €280,800 before works
• New: €338,000 + 2.5% notary (€8,450) = €346,450

Before even talking about renovate vs new build, the “net notary” gap is down to €65,650. The key is now to quantify montant_travaux.

1.2. Montant_travaux: how to estimate it seriously

For an old property, renovation can range from €300/m² (refresh) to €1,200+/m² (heavy energy retrofit + layout changes). On 65 m²:

• Light scenario (paint, floors, mid‑range kitchen): €400/m² → €26,000
• Full scenario (electricity, plumbing, bathroom, insulation, windows, heating): €900/m² → €58,500

If you plan an energy renovation to improve the EPC/energy label (crucial for resale value and future rental rules), a €50,000–60,000 budget is common. The buy or rent simulator lets you enter this montant_travaux and see how it affects the total cost.

2. Worked example: old vs new over 20 years

Common assumptions (Europe, 2024‑style context):

• Loan rate: 3.6% fixed over 20 years
• Borrower insurance rate (taux assurance): 0.30% of the loan amount
• Annual inflation: 2.5%
• Investment return if renting: 4%/year in diversified ETFs

2.1. Scenario A: buy old and renovate

Data:

• Purchase price: €260,000
• Notary fees (8%): €20,800
• Montant_travaux: €55,000 (energy retrofit + full interior)
• Agency fees: €10,000
• Down payment: €60,000

Initial total cost:

• €260,000 + €20,800 + €55,000 + €10,000 = €345,800
• Down payment €60,000 → loan = €285,800

Loan payment (3.6%, 20 years, excl. insurance): about €1,680/month. With insurance (0.30%): +~€70/month → ~€1,750/month.

Property tax (montant_fn): for old stock in city centres, it tends to be higher. Assume €1,400/year initially, with annual property tax increase of 3% (in line with recent trends in many cities).

Over 20 years, assuming steady growth:

• Year 1: €1,400
• Year 20: €1,400 × (1.03)^19 ≈ €2,409
• Total over 20 years ≈ €34,000 (ballpark)

Add ongoing maintenance (roughly 1% of price per year in old buildings, so €2,600/year → ~€52,000 over 20 years), and it’s clear the true cost is far above purchase + works.

2.2. Scenario B: buy new build

Data:

• Purchase price: €338,000
• Notary fees (2.5%): €8,450
• Montant_travaux: €5,000 (kitchen, wardrobes)
• Agency fees: €0 (direct from developer)
• Down payment: €60,000

Initial total cost:

• €338,000 + €8,450 + €5,000 = €351,450
• Down payment €60,000 → loan = €291,450

Loan payment (3.6%, 20 years, excl. insurance): about €1,710/month. With insurance: ~€1,780/month.

Property tax (montant_fn): some new builds benefit from temporary reductions, but reassessments can be steep. Assume:

• Years 1–2: €900/year
• From year 3: €1,100 with 3% annual increase

Total over 20 years comes to roughly €27,000. Maintenance is lower at first (new building, better energy performance). Using 0.5% of price/year on average:

• 0.5% × €338,000 = €1,690/year → ~€34,000 over 20 years

2.3. Side‑by‑side comparison

Over 20 years, if we roughly sum up:

• Old + renovation:
  • Initial cost (purchase + notary + works + agency): €345,800
  • Interest + insurance over 20 years (~3.6% + 0.30%): ≈ €115,000
  • Property tax: ≈ €34,000
  • Maintenance: ≈ €52,000
  • Approx. total: ≈ €546,800
• New build:
  • Initial cost: €351,450
  • Interest + insurance: ≈ €118,000
  • Property tax: ≈ €27,000
  • Maintenance: ≈ €34,000
  • Approx. total: ≈ €530,450

In this example, despite the higher price per m², the new build is not necessarily more expensive over 20 years, thanks to:

• A much lower montant_travaux
• A lower initial montant_fn (property tax)
• Reduced maintenance costs

But results change a lot if renovation costs are lower, or if property tax rises faster on new stock. This is why you need to simulate your exact numbers when deciding renovate vs new build and, more broadly, buy or rent.

3. Where does the buy or rent question come in?

3.1. What if you stayed a tenant in the same type of flat?

To judge whether renovate vs new build is worth it, you have to compare with the scenario where you keep renting.

Assume the same 2‑bed rents for €1,150/month (excluding service charges), with an annual rent increase in line with an IRL‑type index: say +2%/year.

• Year 1: €1,150
• Year 20: €1,150 × (1.02)^19 ≈ €1,700
• Total rent over 20 years: roughly €330,000

As a tenant, you have no renovation, no property tax, no major maintenance risks. But you can invest the down payment and part of the monthly cashflow that would otherwise go into ownership.

3.2. Investment rate: the tenant‑investor argument

With an investment rate of 4%/year (global equity ETFs, for instance), if you invest:

• Your €60,000 down payment
• The monthly gap between full ownership costs (mortgage + property tax + maintenance) and the rent you actually pay

Over 20 years, the final capital can be substantial (often in the hundreds of thousands of euros depending on assumptions). The buy or rent simulator compares, over 15–25 years, your net wealth in both cases: owner (old or new) vs tenant‑investor.

Only by combining:

• Purchase price
• Montant_travaux (renovation budget)
• Montant_fn (property tax and its revaluation)
• Loan rate and insurance rate
• Inflation and rent growth
• Investment return

…can you seriously compare renovate vs new build and, more broadly, buy or rent.

4. Montant_travaux: when renovation becomes risky

4.1. The items that blow up the budget

In a renovation, a few line items can quickly make montant_travaux explode:

• Structure (floors, load‑bearing walls, roof): major overruns
• Unsafe electricity / gas: full rewiring/re‑piping
• Heating system (heat pump, boiler, distribution): €8,000–20,000
• Insulation + high‑performance windows to improve EPC: €15,000–40,000

A €20,000–30,000 difference on montant_travaux completely changes the comparison with a new build. For example, if our renovation budget goes from €55,000 to €80,000:

• Initial cost for old flat → €370,800 instead of €345,800
• Higher loan → higher monthly payments, interest and insurance

In that case, the total cost of the old property clearly exceeds the new build, while still carrying potentially higher property tax.

4.2. Energy label, rental future and resale value

Another key aspect of renovate vs new build: resale value and the ability to rent out the property later.

• Poorly renovated old stock with an F or G energy label may become hard to rent and lose value in real terms.
• Well‑located new builds with A or B labels often enjoy a green premium on resale.

If your strategy is long‑term wealth building, you should enter into the buy or rent simulator an assumption about future value (appreciation or discount), depending on renovation quality and energy performance.

5. Montant_fn: property tax as a hidden but critical cost

5.1. Why property tax matters more than most buyers think

Property tax (montant_fn) varies widely: from around €450/year in some small towns to well over €5,000/year in big cities or for large properties. Between 2010 and 2023, property taxes in many countries rose significantly faster than inflation.

Old city‑centre stock often sits on higher cadastral values. New developments may enjoy partial exemptions for a few years, but reassessments are common and increases can be sharp.

5.2. Long‑term impact over 20 years

Back to our ballpark numbers:

• Old flat: ≈ €34,000 in property tax over 20 years
• New build: ≈ €27,000 over 20 years

A €7,000 gap may look small over two decades, but:

• It adds to heavier renovation costs
• It reduces how much you can invest every year

In a buy or rent perspective, property tax is also an opportunity cost: as a tenant, those thousands could have been invested at your chosen investment rate (say 4%).

6. Summing up the renovate vs new build (and vs rent) calculation

6.1. A practical comparison checklist

To compare quickly, list:

• Old to renovate:
  • Net purchase price
  • Notary fees (7–8%)
  • Agency fees
  • Montant_travaux (with a +15–20% safety margin)
  • Property tax (montant_fn) + expected annual increase
  • Annual maintenance (0.8–1.2% of price)
• New build:
  • Developer price
  • Notary fees (2–3%)
  • Montant_travaux (usually low: fit‑out only)
  • Property tax (montant_fn) + any temporary exemptions
  • Maintenance (0.3–0.6% of price at first)
• Renting:
  • Initial rent + annual indexation (IRL‑style)
  • Monthly saving capacity
  • Investment rate

Then feed these numbers plus your loan rate, insurance rate, inflation and investment return into the buy or rent simulator to see how your net wealth evolves in each scenario over 10, 15, 20 or 25 years.

6.2. No universal answer: it depends on your situation

There is no categorical winner between renovate vs new build, and even less between buy or rent. It depends on:

• Your ability to manage a renovation project (time, stress, skills)
• The actual condition of the old property (surveys, structure, energy label)
• Local tax levels (montant_fn and likely revaluations)
• Your holding period (5, 10, 20+ years)
• Your risk tolerance for markets and real estate

This article is not personalized financial advice. It offers a quantitative framework to structure your thinking about renovate vs new build and to embed the buy or rent decision in a long‑term investment logic.

7. Turn theory into numbers

To move from theory to your real life, the key step is to enter your own figures: actual prices you’re seeing, your estimated montant_travaux, local montant_fn, the loan rate your bank offers, and the investment rate you expect if you stay a tenant.

Simulate your situation on buy-or-rent.net (or acheter-ou-louer.com) and test multiple renovate vs new build scenarios, as well as buy or rent options, before you commit.