Selling in viager in Paris

After years spent buying and maintaining your home, your property often represents a large share of your wealth. Yet that wealth is not always available to fund your everyday life.

The viager, a French form of property sale, offers an option: you sell your home, receive an immediate lump sum and, depending on the terms chosen, a regular income for the rest of your life. With an occupied viager, you can also keep the right to live in your home.

This option deserves careful thought. It can improve your financial situation, but it also transfers ownership of the property and has consequences for your estate.

At METROREALTY, we support you in this decision with an accurate valuation, transparent information and an approach tailored to your personal situation.

Some homeowners want to travel, help their children or grandchildren, carry out work or simply enjoy more financial freedom. Others want to anticipate the cost of staying at home, daily assistance or adapting their home.

A viager can meet these needs without requiring you, in its occupied form, to leave your home.

Topping up your pension

The life annuity (rente viagère) is an additional income paid at the frequency set in the deed, usually monthly. It can help balance your budget and fund expenses that pensions do not always cover.

The annuity is due for the whole life of the designated beneficiary or beneficiaries, subject to the terms of the contract.

Receiving capital straight away

The bouquet is the lump sum paid to the seller when the final deed is signed. It can be used freely: savings, works, personal plans, family support or a financial reserve.

Its amount is negotiable. The larger it is, the smaller the share of the value converted into an annuity.

Staying in your home

With an occupied viager, the seller keeps a right that allows them to stay in their home, preserving their habits, neighbours and surroundings.

This right can be a right of use and habitation or a usufruct. The two do not offer exactly the same possibilities and should be compared before the sale.

Planning for your spouse

A viager can be set up to protect two people. A reversionary annuity can be paid to the survivor, without any reduction if the deed provides for full reversion. Occupation rights can also be arranged so that the surviving spouse can stay in the home.

These protections are not automatic: they must be expressly written into the deed.

This valuation is based on the address, floor area, floor level, light, condition, the features of the building and comparable sales.

With an occupied viager, the economic value of the right kept by the seller is then assessed. It depends on the nature of that right, the beneficiaries’ ages, longevity assumptions and the financial parameters used. The result is an occupied value, which is split between the bouquet and the annuity.

Two homes of the same value can therefore lead to very different bouquets and annuities: age, number of beneficiaries, the nature of the right kept and the clauses of the deed all change the result. That is why we do not publish a scale: every situation is studied individually.

Only part of the annuity is subject to income tax. This share depends on the beneficiary’s age at the first annuity payment: for a person aged 70 or over, it is 30%.

So for an annuity of €18,000 a year, only €5,400 is added to taxable income. This is not a 30% tax, but the share subject to the income tax scale. Any social charges that may apply should also be considered.

The bouquet falls under the capital gains rules for property. When the home is the seller’s main residence and the legal conditions are met, an exemption may apply.

Your tax situation should be checked individually before signing, with your notary or tax adviser. Non-residents may be subject to different rules.

• By selling your home, you transfer its ownership to the buyer: the property will no longer pass to your heirs.
• The annuity depends on the buyer fulfilling the contract, even if guarantees limit this risk.
• The seller may keep some charges, depending on the right of occupation and the clauses of the deed.
• A poorly valued viager can lead to unbalanced financial terms.

This is why a decision to sell should always be preceded by a study of the value of the home, your financial needs and the alternatives.

At METROREALTY, we rely on an in-depth knowledge of the Paris market, the analysis of comparable transactions and the study of each property’s own features. This property value is the basis of the viager study, which then takes in longevity parameters and the clauses of the contract.

Our role is to present the different options, explain their consequences and prepare your project together with the notary and your advisers. The study is complimentary and carries no obligation to sell; if you sell, our fees are those of our fee scale. We speak five languages.

Still weighing a conventional sale? Read our seller’s guide or value your property online.

Thinking of buying instead? Understand buying in viager