How does a life annuity sale work?
The seller transfers either full ownership or bare ownership (keeping the right to live in or use the property). Part of the price is usually paid when the deed is signed (the lump sum, known as the 'bouquet'), and the rest is converted into a monthly annuity. The annuity stops when the annuitant dies or at the end of the agreed term.
A life annuity is an aleatory contract: both parties stand to gain or lose, depending on how long the seller lives. That element of uncertainty is essential. Without it, the sale can be annulled.
The benefits
For the seller
A supplement to your pension with an index-linked annuity. If you sell the bare ownership, you simply continue to live in your home. And you bear none of the transaction costs.
For the buyer
Acquire property without paying the full price straight away, and without financing costs. If you buy full ownership, rental income can help pay the annuity.
Frequently asked questions
How is the annuity calculated?
Based on the value of the property, the age of the seller, the lump sum and whether you sell full or bare ownership. We make a tailored calculation.
Is the annuity taxable?
The tax treatment depends on your situation. We look into this together with your notary.