A viager project is a meeting between two parties, the seller and the buyer, offering a practical solution to their specific requirements.

The seller, generally aged over 60, has a property and wants to increase his monthly income to make the most of his remaining years. A viager project is a good solution to counter such complexity and uncertainty : no change of environment, life-time annuity payments without having to worry about tomorrow, a lump sum paid immediately to do something special or help loved ones.

The buyer has a regular income and wants to put some aside to protect his family or in preparation for a time when his income will be reduced. Above all, he wants a safe, profitable investment and is attracted by the possibility of owning property in Monaco or along the Riviera, with the ultimate aim of moving there or making frequent visits. He is aware that the overall cost is not set at the time of the sale and will depend on how long the sellers live, but he accepts this uncertainty as part of life and knows that no investment can offer good profitability without a certain element of risk... Finally, he is happy to participate in an ethical and responsible transaction that will enable the seller to manage an active retirement under the best possible conditions.



Inhabited Viager

01

The inhabited viager is the most common project.

With an inhabited viager, the seller stays at home, reserving his right of use and habitation, either for the rest of his life or for a certain period, defined in advance in the contract.

The transaction comprises :

  • Immediate capital, called the lump sum, upon signature of the deed of sale
  • Annuity payments as long as the seller is alive.

The contract can be signed by a single person or a couple. In this case, the annuity payments will be made until the demise of the last living member of the couple.

At any time, the seller can give up his "right of use and habitation" in exchange for an increase in the annuity payments, according to the terms specified in the deed of sale.

The right of use and habitation reserved by the seller is valued according to the quality of the property and the life expectancy of the seller(s). In a way, this represents the value of the "rent" paid by the seller to the buyer in exchange for remaining in the property that he has sold. The value of the right of use and habitation is deducted from the overall value of the property.



Vacant Viager

02

With a vacant viager, the seller vacates the property, which is immediately made available to the buyer. The latter may use it as he sees fit, either living it in himself or renting it out to a third party.

The viager calculation does not include any value for the right of use and habitation and the vacant value is directly converted into a lump sum plus annuity payments.

Owners of rented properties often prefer a vacant viager project, to avoid the complications of tenant management. This solution enables the seller to receive a lump sum immediately and to preserve a regular income that is more tax-efficient than rent, since annuity payments can be tax-exempt up to 70% in France.

The transaction comprises :

  • Immediate capital, called the lump sum, immediately upon signature of the deed of sale
  • Annuity payments as long as the seller is alive.

As for the inhabited viager, a single person or a couple can sign the contract. In this case, the annuity payments will be made until the demise of the last living member of the couple.



Forward Sale

03

A forward sale is a fixed term contract whose sale price is composed as follows: a portion is paid in cash on the day of signature and the remainder is paid in instalments over time.

A forward sale is therefore like a vendor-credit. It enables the buyer to invest at his own pace without needing a bank loan, with the guarantee of a fixed price, since the number of monthly payments is pre-determined. If the seller(s) dies(die), the monthly instalments are paid to his (their) heirs, until the end of the contract.

The seller may reserve a right of use and habitation for the rest of his life or for a period defined in advance. If the property is vacated before the end of the payments, the contract generally stipulates revision of the monthly payment.

For the seller, the forward sale offers an alternative to a traditional viager project :

  • If he is too young to opt for a traditional viager, avoiding excessively long periods of annuity payments for the buyer
  • To guarantee a fixed price for any situation.
  • To assist his heirs in the event of early demise.



Bare Property

04

Bare Property sale is an operation that separates the ownership from a property for which the seller reserves the usufruct.

As well as living in his property, as for an inhabited viager, the seller can loan it or rent it out, receiving rental income.

This separation operation provides the seller with more rights over the building than with an inhabited viager, without limiting his guarantees (first-ranking mortgage, seller's privilege, termination clause).

In this case, the seller remains liable for all the charges and taxes concerning the building.

When the property is sold, the value of the bare property can be paid :

  • in full, upon signature of the deed of sale,
  • as a life annuity (lump sum + annuity payments),
  • as a forward sale (cash payment + instalments).

For the seller, a bare-property sale may offer an alternative to a traditional viager project :

  • if he wants to keep the right to use the property as he wants
  • if he wants to complement the rental income with annuity payments.

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