The life annuity is a method of selling real estate in which the seller transfers his or her property to a buyer, called the debirentier, in exchange for a life annuity. This annuity is a sum of money that the debirentier agrees to pay the seller every month, quarter or year for the rest of his or her life.

There are two types of life annuity these are the occupied life annuity and the free life annuity. In the first case, the seller continues to live in the property and the debtor can only take possession upon the seller's death. In the second case, the seller leaves the property and the debtor takes immediate possession.

The price of a property in life annuity the price of a life annuity is determined according to several criteria, such as the age and life expectancy of the seller, the value of the property, the amount of the life annuity desired, etc. It is important to note that the price of a life annuity sale is often lower than that of a conventional sale, as the debirer takes the risk of having to pay a life annuity for many years.

What are the advantages of a life annuity?

• A sale solution for homeowners who need immediate cash but do not want to leave their home
• Possibility for the seller to remain in the property until his death or until he decides to leave the property
• Receipt of a regular life annuity for the seller, even after the sale of the property
• Opportunity for the seller to provide financial security for retirement
• Opportunity for the buyer to purchase a property at a lower price than in a traditional sale
• Opportunity for the buyer to make a real estate investment with an interesting profitability on the medium or long term.

Taxation of life annuities

What are the tax advantages of a sale in life annuity for a seller?

• Exemption from capital gains tax: When selling a life annuity, the seller may be exempt from capital gains tax, as the sale is considered a life annuity and not a traditional property sale.
• Reduced inheritance tax: In the event of the death of the seller, the heirs will only pay inheritance tax on the value of the annuity and not on the total value of the property.
• Possibility of recovering the usufruct: If the seller has retained the usufruct of the property sold, he can deduct the expenses relating to the maintenance of the property from his property income.

For the buyer, the sale in life annuity can offer the following tax benefits:

• Reduced notary fees for an occupied life annuity: they are not calculated on the market value of the property, but on its discounted value taking into account the right of use and habitation (DUH)
• Potential to reduce income tax: Annuities paid by the purchaser to the life annuity seller can be deducted from the purchaser's taxable income, which can reduce income tax.

Contact your local VIAGER specialist in Mouans, Mougins, Valbonne and its surroundings

Marc CAMPANELLA on 06.101.101.54

Thank you and we will accompany you in all your real estate projects!

Marc CAMPANELLA - EXPERT AND REAL ESTATE AGENT - 06.101.101.54

1, Av. de Grasse 06370 Mouans-Sartoux

Real estate expert certified CNE (Centre National de l'Expertise - NICE)