Life annuity of a real estate

  • 1 : What is a life annuity?
  • 2 : The occupied life annuity
  • 3 : The free life annuity
  • 4 : Advantages for the seller
  • 5 : Advantages for the buyer
  • 6 : How to estimate your property ?
  • 7 : How to determine a life annuity?
  • 8 : Why call on us for your life sale?

1 : What is life annuity ?

Definition of a life annuity : Life annuity means "time of life". The life annuity consists in selling a real estate to a third party in exchange for the payment of a periodic (monthly) life annuity. This annuity can be accompanied by a bouquet, i.e. a sum of money paid in cash at the time of the signature of the sale act.

2 : What is the occupied life annuity ?

The occupied life annuity : The seller transfers his property to the buyer but retains his right of use and habitation. He can thus continue to occupy it until his death. The occupied life annuity corresponds to the sale of a real estate (housing, house, ground...) of which the creditor (salesman) reserves a Right of Use and Dwelling (to occupy the good) or a usufruct (to occupy or rent the good) during his life.

3 : What is the free life annuity ?

The free life annuity : The seller transfers his property to the buyer who can occupy it as soon as the deed of sale is signed without having to wait for the death. The free life annuity corresponds to the sale of a real estate whose debirentier (the purchaser) will have the free disposal of the good. The purchaser can occupy or rent the property at his convenience. The seller benefits from a bouquet at the signature of the sale and from an annuity for life (he exchanges the potential rents against a low taxed and totally secured annuity). Translated with (free version)

To best satisfy both parties, the life annuity contract provides benefits for the seller but also benefits for the purchaser

4 : Benefits to the seller

Advantage to the seller:

  • The seller, known as the creditor, receives a capital and additional income guaranteed for life
  • Benefits from an estimated bouquet at the beginning

Seller no longer pays:

  • Property tax
  • Structural work (restoration, roofing, stairwells, etc.)
  • The fees of the trustee in case of co-ownership
  • Ability to stay in your home for life
  • Possibility of passing on one's inheritance during one's lifetime to whomever one wishes without inheritance tax
  • Receive additional income each month
  • Tax benefits

5 : Advantages for the purchaser

Advantage for the buyer:

  • A medium/long term investment
  • This investment offers an average return of 6.8% per year
  • The acquisition of a property at a reduced price
  • The sale price is reduced by the occupancy discount, which corresponds to a "theoretical rent" paid by the occupying sellers
  • The acquisition of a property at your own pace and without recourse to a bank loan
  • The buyer/investor pays a cash amount and then pays a monthly payment to the seller over a fixed period. The buyer benefits from a seller's credit and therefore does not pay bank interest.
  • A very favorable tax framework. There is no taxation of the theoretical rents received at the time of acquisition in the form of a reduction in the price, and reduced notary fees

6 : How to estimate your property (rent and bouquet)?

To estimate a life annuity it is necessary to establish a calculation, with the age of the person, the price of the good determined by our experts, if this person wishes to occupy it (usufruct), we will establish a calculation with the selling price, a percentage with the occupation of the good which will determine us the price of the bouquet.

7 : How to determine a life annuity?

  • The land value of the property
  • Age of the seller
  • The calculation of a bouquet and its amount
  • The free or occupied status of the property sold in life annuity
  • The life annuity is subject to income tax, so it benefits from an allowance whose amount varies according to the age of the seller at the time of the first payment of the annuity

Thus, only a fraction of the life annuity is taxed, as follows:

  • 70% for a 1st under 50 years old
  • 50% for a 1st payment from age 50 to 59
  • 40% for a 1st payment from age 60 to 69
  • 30% for a 1st payment over the age of 69

8 : Why call on us for your life sale ?

The life annuity is a complex procedure that it is preferable to carry out with a professional.

Our experts, accompanies you throughout the procedure and until the signature of the sale contract. offers you your life annuity as well as your bouquet.

We are an agency specialized in life annuity, formed by the national center of expertise.