Buy a life property

There was a time when life annuity purchases were frowned upon: people were banking on the death more or less soon of the owner to make (or not) a “good deal”. In recent years, buyers and sellers have no longer had this vision at all. For sellers, putting their house or apartment on life annuity means the certainty of being able to stay in their home as long as their health allows it. Leaving a house to your children is sometimes no longer a matter of circumstances, because they are already settled in their own home. With the money from the “bouquet”, many retirees with a small pension can calmly consider staying at home. On the buyers’ side, this must be seen as an investment, just as legitimate as buying a tax-exempt property. You buy a property that you would like to occupy in retirement in an area where it is sometimes difficult to find, or to pass it on to your children or to make it profitable by renting it.

The life annuity is, in fact, a classic real estate sale: ownership of the property is transferred, as soon as the deed of sale is signed, to the new owner, called the deliberator. The seller is the annuitant.

The sale price is broken down into a bouquet, a lump sum paid upon signing the deed and an annuity paid, regularly, most often every month, to the former owner. This is where the random side of selling lies. No one knows if the latter will become a hundred years old or not.

The life annuity can be free or occupied (this is the most common case!) by the former owner. The new person will therefore only have full enjoyment of his property upon his death. Most often, an early release clause is provided, if the occupant can no longer stay in the accommodation for health or mobility reasons. This clause authorizes the revaluation of the annuity paid.

The sale is subject to transfer taxes like any real estate transaction. The annuity paid to the annuitant is taxable, with a reduction depending on his age) and subject to social security contributions. ■