Michaël Zingraf Real Estate, through its Serenity Capital department, offers a new format for real estate sales through viager. In this new format, the seller can receive up to 70% of the value of their property while retaining the usufruct or right of habitation. In this article, we will explain and present the different formats of viager sales and clearly explain the process for both the seller and the buyer.
What is viager?
Viager is the sale of a property to a person who pays a lifetime annuity to the seller until their death. The distribution of payment for the expenses of the sold property differs depending on the type of viager or the clauses of the sales contract. According to the website Service-Public.fr, the viager sale is based on the principle of alea, meaning that the seller and buyer do not know the amount of the property that will be acquired at the time of the signing of the sales contract. Indeed, the amount of the viager property depends on the date of the seller's death. If the seller is ill at the time of the signing of the sales contract and dies within 20 days, the sale can be canceled.
The two types of viager: viager libre or viager occupé.
Viager Libre:
Viager libre means that the seller transfers their property to the buyer, who can occupy it immediately after the signing of the sales contract without having to wait for the death of the seller. The buyer can choose to live in the property themselves or to rent it out. However, this type of viager has a disadvantage: the annuity paid by the buyer is higher than that of a viager occupé.
Viager Occupé:
Viager occupé, on the other hand, means that the seller transfers their property to the buyer but retains the right to use and occupy it. The seller can continue to live in the property until their death. The buyer must wait for the seller's death before being able to occupy the premises.
The bouquet and the lifetime annuity
When the buyer purchases a property through viager, they must pay a bouquet and a lifetime annuity. The bouquet corresponds to a lump sum payment at the time of the sales contract, although it is not mandatory. Its amount is agreed upon by both parties and represents approximately 30% of the value of the property. The annuity corresponds to the monthly payments made until the day of the seller's death. Its amount is determined by the notary based on the following elements: the status of the property (occupied or not), the payment or non-payment of a bouquet, the market value of the property, and the age of the seller.
Advantages for the seller
Selling a property through viager is advantageous for the seller. Firstly, they benefit from a lifetime annuity from the time of the signing of the sales contract. Moreover, this lifetime annuity enjoys a rather advantageous tax regime. The seller of a property through viager receives a lifetime annuity starting from the signing of the sales contract. Only a percentage of the lifetime annuity is subject to taxation. These conditions vary depending on the age of the seller, particularly at the time of the first payment of the lifetime annuity: 70% for a first payment under the age of 50, 50% from 50 to 59 years old, 40% from 60 to 69 years old, and 30% for those over 69 years old.
Secondly, the seller does not have to pay property tax or the amount of any planned work by the building manager, even if they still occupy the property. However, they must continue to pay their habitation tax.
Advantages for the buyer
For the buyer, purchasing a property through viager allows them to spread out their payment and avoid additional expenses, as they will pay their lifetime annuity directly to the seller and not to a bank. It also allows them to benefit from an interesting discount compared to the prices of properties on the market. Furthermore, it enables them to gradually build their real estate assets and plan for their retirement by securing their future.