Vaneau Viager

GENERAL PRINCIPLES

The life sale is a contract in which the rights and obligations of the signatories are limited to the lifetime of one or more persons designated in the sales contract. In a life annuity sale, the purchaser pays a part of the price in the form of a "bouquet" and another part in the form of a life annuity which is paid, monthly, quarterly of annually, during the lifetime of the seller(s). The annuity will be paid for one or more persons to designate the creditors whose death will mark the end of the payment. The life annuity is thus a "random" contract.

ADVANTAGES OF VIAGER

The sale in viager presents advantages for the seller :

• The seller is assured of a fixed income to complete his retirement while keeping the use of the sold property until his death.
• The seller can at any time transform the occupied life annuity into an unocuppied life annuity and thus receive a more important annuity in compensation for the release of the property.
• In occupied viager, the seller benefits from a reduction of his co-ownership charges and will no longer be liable for property tax, no for major works that may be voted in the building.
• The seller benefits from a significant tax deduction on the amount of the viager to be declared. This fraction varies according to the age of the annuitant at the time of the beginning of enjoyment of the annuity and can reach an abatement of 70%.

The viager also presents advantages for the purchaser :

• To become the owner of a property without having to mobilize large sums of money at the time of the sale.
• To finance a property without resorting to a bank loan.
• For occupied life annuities, the buyer pays reduced registration fees, calculated on the occupied value, and can expect a capital gain when the property is vacated and resold.

IMPORTANT GUARANTEES FOR THE SELLER

The payment of the annuity is guaranteed by :

• The seller's privilege (mortgage guarantee) allowing him, in the absence of payment of the annuity, to proceed to the cancellation of the deed of sale of the property.
• The resolutory action : it allows the seller to take back his property.
• When a penalty clause has been stipulated, the seller will keep the annuities already received as well as a part, or even the totality of the bouquet.
• To discourage late payments, it is possible to provide for the application of a late payment interest rate.
• An "enforceable copy" of the sale is given to the seller to allow him to pursue payment of the annuity.

TO SELL IN LIFE ANNUITY

The viager sale is a classic real estate sale subject to particular modalities, it must therefore be in conformity with the regulations and respect the formalism and the conditions of this specific act. The annuity is determined according to the market value of the free or occupied property as well as the age of the creditor(s). To make the calculation we apply an average between several scales.The creditors has the faculty to reserve the usufruct or the exclusive right of use and dwelling, it is then advisable to take account of this reserve to carry out the calculation of the life annuity. The creditors can ask for the payment of a bouquet and the balance of the price will be converted into an annual life annuity which will be paid monthly, quarterly or annually. To mitigate the effects of monetary erosion, it is strongly advised to index the annuity.

TAXATION 

The annuity received will be subject to the income tax scale, after deduction of an important tax allowance which will take into account the age of the annuitant at the time of the realization of the deed of sale. This deduction can go up to 70% of the amount received by the creditor.

CAPITAL GAINS

The creditor may be subject to capital gains tax if he has owned the property for less than 24 years for income tax purposes and for less than 30 years for social security contributions, unless benefits from an exemption in the event of the sale of his principal residence for example. In addition, a fraction of the annuity is subject to income tax depending on the age of the creditor at the time the annuity becomes payable. On the other hand, the buyer cannot deduct anything from his taxable income.

WEALTH TAX

In the case of a property sold as an occupied life annuity, the creditor (the seller) must declare the capitalization value of the annuity. The debirentary (the purchaser) must enter the capitalization value of the annuity in his deductible liabilities. Both parties must record the market value of the property on the assets side of their estate, based on their respective rights, as in the case of a real estate dismemberment, with the debtor being able to apply an allowance for occupancy of the property. The relevant scales are provided each year by the tax authorities with the wealth tax return.

VANEAU VIAGER, A TAILOR-MADE SUPPORT AFTER THE SALE

Vaneau Viager, with an experience of more than 30 years in life sales, advises you and accompanies you for all the modalities of the life sales realized by its care :

• The calculation of the indexation of the annuity annually,
• The calculation of the new life annuity, in case the creditor would like to transform the occupied life annuity into free life annuity,
• The calculation of the annual distribution of the expenses between the debtor and the creditor for the properties in joint ownership,
• To determine the distribution of the works between the debtor and the creditor,
• Any advice concerning the follow-up of the life annuity by entrusting the management to our administration of property.

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Contact Vaneau Viager to carry out your project.