Selling a life annuity: what are the procedures?
Selling a life annuity is a profitable property solution based on a contract signed by the owner and the buyer. This solution is of particular interest to the seller, who can choose to remain in his own home until his death. This process is a godsend for those who want to be cared for at home, as the associated costs (care assistant, domestic help, etc.) are often high.
How does a life annuity sale work?
By choosing to sell a property as a life annuity, lhomeowners benefit from a regular income that enables them to meet their needs and earn a higher return than if they had taken out life insurance.
A life annuity sale allows the seller to obtain additional income immediately by receiving the bouquet, when the contract is signed, and then regularly by receiving a, monthly, quarterly or annual annuity, usually until the seller’s death. Payment can also be made in a single lump sum :
- Si If the vendor opts for an occupied life annuity, he or she is authorised to remain in the property and retains the right to use and live in it;
- In the case of an unoccupied life annuity, the purchaser may take possession of the property as soon as the final deed has been signed.
The terms of the sale are initially recorded in the land register and authenticated by the chosen notary. The buyer then becomes responsible for the various costs incurred on the property, as well as any related taxes. The seller, for his part, has a capital sum that he can use as he wishes or distribute to his children and grandchildren.
The procedure for offering your property for sale as a life annuity
Initially, the seller will seek advice from an estate agent who is an aexpert in life annuity. They are given advice on the best procedure to follow, depending on their personal situation and wishes
By opting for a monthly life annuity, cthe homeowner can be sure that the amount will increase if the cost of living rises. The sale price therefore depends on a number of factors and remains closely linked to the seller’s lifetime.
Note that a life annuity sale can be cancelled if the vendor dies as a result of an accident or illness in the days following the signing of the deed. What factors should be taken into account when drawing up the contract?
- the vmarket value of the property as estimated by an experienced estate agent ;
- the state of health and age of the property owner; ;
- the precise amount of the bouquet, ewhich is generally no more than 30% of the estimated total cost ;
- the type of life annuity : unrestricted or occupied.
It is possible to sell a flat or house on a life annuity basis at near-market conditions, although a discount is always applied. Teams from Germany’s most reputable estate agents visit the properties, identifying their strengths and weaknesses before determining a selling price in line with the services provided.
How do you calculate the amount of the sale or the life annuity?
In Berlin, as in Paris, the market is under pressure. Many newcomers are looking for properties in the most sought-after districts. By entrusting your sale to a well-established agency with in-depth knowledge of the market, such as Aden Immobilier, you increase your chances of finding a buyer quickly, and on your terms.
To find out the mpossible amount of your life annuity, you need to base yourself on the estimate made by the local estate agent. Aden Immobilier takes into account the location, the general condition of the exterior, the surface area, the number of rooms, the layout and decoration, etc. To sell at the right price, the agent may advise you to carry out some home staging or refurbishment work.
You can either ask for a one-off payment, or opt for a life annuity the amount of which is based on your life expectancy. In all cases, the life annuity professional will indicate which solution is the most profitable and, if necessary, refer the interested party to a tax or asset adviser.
Finally, you should be aware that the life annuity must be declared on the income tax form, but benefits from specific allowances and a special regime. This is not the case for the bouquet, which is 100% exempt.
If the vendor continues to occupy the property, he or she will continue to be liable for council tax, but will no longer be concerned by property tax and any property management charges.
Selling a life annuity can be complicated for an individual. By working with an experienced agency such as Aden Immobilier, a French-speaking estate agent based in Berlin, we can provide you with tailor-made support right up to the signing of the final deed of sale. Eden Immobilier is recognised as the leading agency on the market for French people in Germany.
