Life annuity does not just apply to traditional properties. You can also buy a luxury home without paying annuity instalments.
Life annuity may not be particularly well known outside France, but it was the subject of the famous French comedy film directed by Pierre Tchernia, Le Viager (the French term for ‘life annuity’). A fictional example, admittedly, but one derived from a real-life case, that of Frenchwoman Jeanne Calment, the life annuity of whose home lasted 32 years! A story to give any buyer under this scheme cold feet!
When it comes to luxury realty, life annuity sales can be a deterrent due to the high annuity payments of up to €4,000 per month. But these amounts can now be reduced through payment solely of the initial settlement on signing of the deed of sale.
Buyers can therefore buy a luxury house or apartment under life annuity at a reduced price, set once and for all and not dependent on the vendor’s lifespan. “This option is similar to separation of property”, explains Vincent Desmarie, Associate Director of BARNES Life Annuity. “The vendor transfers the bare ownership of their property but retains the usufruct or the right of use and of dwelling (they cannot rent it, sell it or gift it unlike usufruct), during their lifetime”.
In concrete terms, vendors find themselves at the helm of substantial capital that they can use for themselves or for their children, while continuing to live in their home. “Vendors are generally over the age of 75 and do not want to leave their homes, even more so given the increasingly expensive medical and care costs”, emphasises Vincent Desmarie.
For more information on life annuity, get in touch with our BARNES Life Annuity team.
© Le Figaro Immobilier - published on Barnes International Realty on 19/10/2020
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