What is free life estate?
The life annuity is a real estate transaction which consists in the buyer paying each month or each quarter a sum established in advance and reflected in the deed of sale. These periodic sums (life annuities) are added to another fixed amount called the bouquet, an amount paid when the property is purchased.
What are the advantages of free life for the seller?
The generation of fixed income is the main advantage of the free life for the seller, the annuitant. By selling his property in this way, he converts it into sustainable and immediately available capital. The seller is therefore guaranteed to receive regular annuities until his death. The free life annuity is also very interesting from a tax point of view, since it allows the annuitant to benefit from a reduction of up to 70% of the taxable share.
What are the advantages of free life for the buyer?
By opting for free life, the buyer or the annuitant does not need to pay a considerable sum at the time of purchase. He must certainly pay a starting sum (bouquet), but can then spread the payments over several years. It allows buyers with limited wealth to buy the house or apartment they are looking for without having to save years, and quickly fulfill their real estate dream.
Free life or busy life?
The life annuity is especially interesting for the owner who retains the right to enjoy his property, if he refuses to part with it completely. That said, the income generated is less important than under the free life. If you decide to sell in free life, the sale price of your house or apartment can be up to 50% more expensive than in case of occupied life.
How to sign a free life sale contract?
The life lease contract requires the presence of a notary, because it must be published in the land registry service. The annuitant may ask the notary to add clauses to protect themselves from a withdrawal by the purchaser in the event of termination of the contract (conservation of the bouquet), or of unpaid sums (recovery of the property in the event of non-payment of the annuities). As with all real estate transactions, it is recommended to use a real estate agent or real estate agency who knows the trends in the real estate sector and the specifics of free life before committing. The professional will be able to inform you about market prices. He will calculate the amount of the bouquet and the annuities. After reviewing all of these points, he will develop a promise to sell.
Good to know: the life lease contract has legal value only if the death of the seller is not foreseeable. It is canceled if the annuitant dies within 20 days of the sale, or if he suffers from a pathology which threatens his vital prognosis.
How to constitute my file if I wish to buy a property in free life?
The constitution of your file is an inescapable and crucial step if you wish to buy in free life. To convince the seller, you must provide him with as much information as possible, in particular of a financial nature: monthly income (salary statements, pensions, allowances), charges (credits, taxes), documents attesting to your financial, professional and family, personal contribution, financing methods (loan request), guarantees (insurance covering insolvency in case of impossibility to pay the annuities)…
Fixing annuities
The annuitant and the annuitant are free to negotiate to fix the life annuities, provided that the amount established respects an existing scale. This scale takes into account several aspects such as the age of the seller, the amount of the bouquet and the market value of the property.
Do you want to know everything about life annuity? Discover the advantages and particularities of the busy life annuity.
