Life annuity - The solution to your concerns!

Longer life expectancy, desire to stay in one's home despite age, need to complete a retirement that is not always sufficient, search for a roof over one's head at a lower cost... so many reasons to see the life annuity as an efficient product that is adapted to these very legitimate concerns.

A sale (almost) like any other

Like all real estate transactions, the life annuity purchase is established before a notary. The notary will have first verified that all the conditions relating to the person of the seller (the "creditor") and the buyer (the "debtor"), as well as the property itself are met (capacity to sell or buy, diagnostics...). So far, there is no difference with a "traditional" sale. It is true. But if you look at it more closely, it has two particularities:

• the existence of a hazard, namely the life span of the seller(s);
• a payment by instalments. In principle, the buyer pays an annuity until the death of the seller (and, if applicable, his spouse). The amount of the annuity is determined according to several criteria. In particular, the value of the property, the age and sex of the seller (and therefore his life expectancy), the existence of a reversibility clause (if the property is sold by a couple), the rate of return of the property (calculated according to the rent that the property is likely to bring in). In practice, it is frequent that on the day of the signature of the deed of sale, the buyer pays a sum of money (the "bouquet"), which varies on average between 10 and 30 % of the value of the property.

Selling without leaving the premises

It is paradoxical but possible thanks to the occupied life annuity. This formula of sale corresponds perfectly to the expectations of the sellers, often old, who privilege their maintenance at home. They remain in their homes as long as they wish, while improving their income. This "classic" occupied life annuity sale can be negotiated in cash. The seller benefits from a right to use and live in the property and receives a capital sum in one go. There are no life annuities in this case. The buyer, on the other hand, makes a purchase reduced by 30 to 50% of the initial market value. He controls his investment and the price is paid in one go at the time of thedeed of sale. The life annuity can also be free. In this case, the purchaser has immediate access to the property. He can live in it or rent it as he wishes. The terms of payment are identical to those of the occupied life annuity.

A fair contract

We can say that the life annuity is a "win-win" contract whether you are the seller or the buyer. Whether it is on the side of the salesman or on the side of the purchaser, the life annuity must be regarded as a true investment. Because this type of sale brings many answers to the concerns of the moment. The life annuity assures the seller to receive an annuity for life, allowing him to improve his standard of living, to take full advantage of his retirement, to face expenses that he could not assume without this contribution or to ensure the future of his spouse. The occupied life annuity offers the possibility of remaining at home, of preserving one's lifestyle and habits. Selling your property as a life annuity also allows you to free yourself from certain expenses: property tax, co-ownership expenses, major works...
For the purchaser, the life annuity can be a good means to reach the property without advancing important funds and without resorting to the bank credit. It is a form of investment that allows you to build up a real estate portfolio under very attractive financial and tax conditions and with reduced costs.

Marie-Christine Ménoire