What is a life annuity sale ?
Annuity selling is a formula that makes it possible to sell your property (apartment/home) with the possibility to stay there or not. Depending on the form of annuity chosen, the seller can retain the right to use his building, i.e. continue to live or rent it out in order to generate income. In all cases, the annuity offers the vendor interest until his death, so that he can supplement the monthly amount of his retirement pension.
1. The different forms of life annuities
Free or full ownership: the seller leaves the property and the buyer can enjoy it; the property is therefore free to occupy. The buyer can occupy or rent the property by collecting the rent. He will of course bear all the costs. The seller will receive the amount of the sale and an annuity until his death, which will be determined at the time of the sale.
Occupied annuity (free in the event of death or bare ownership) with lifetime use rights: the vendor can occupy or rent the property for life to collect the rent. The withholding tax and maintenance costs are for the seller's account. The buyer can only occupy the property in the event of the death of the seller, unless the contract expressly stipulates that he can benefit from it in the event of early departure of the seller.
Free life annuity with right of habitation: the seller sells the entire property but retains a personal right of habitation of all or part of the property for a certain period of time.
2. The advantages of annuity sales
- An annuity sale allows you to stay in your home until the end of your life if you wish, while benefiting from an additional financial contribution.
- An annuity sale makes it possible to receive a part of the sale amount directly while you can still live in your house/apartment. This amount is called the bundle and is tax free.
- In addition to the bundle, you will receive the monthly annuity, which is determined at the time of sale. This amount is tax-free and indexed to the cost of living.
- Depending on the type of sale chosen, maintenance work is no longer the responsibility of the seller, but of the buyer.
- In the case of an annuity sale, you do not pay commission to a brokerage firm, the brokerage fees are generally paid by the buyer.