Selling and Buying en Viager
A viager sale converts the value of a property into an initial lump sum, the bouquet, and a life annuity paid to the seller for the rest of their life. This aleatory contract follows precise rules of the French Civil Code and the French General Tax Code: calculating the annuity, the occupancy discount, the taxable fraction, the grounds for nullity, and what happens to the annuity on resale or death. This guide answers the key questions, up to date with the law in force, so you can sell or buy en viager with complete security.
All questions
A viager sale transfers ownership of a property in exchange for an initial lump sum, the bouquet, and a life annuity paid to the seller until their death. The contract rests on a genuine element of chance, the seller's lifespan, required by the French Civil Code on pain of nullity.
The life annuity is calculated in three steps: appraising the property's market value, deducting the value of the right of use and habitation if the viager is occupied, then converting the remaining capital, after subtracting the bouquet, into an annuity based on the seller's life expectancy.
The life annuity received by the seller is taxable only on a fraction set by Article 158(6) of the French General Tax Code according to their age at the first payment: 70% before age 50, 50% from 50 to 59, 40% from 60 to 69, and 30% beyond age 69.
In an occupied viager, the seller keeps a right of use and habitation: the price is reduced by an occupancy discount and expenses are shared between occupant and buyer. In a free viager, the buyer has immediate use of the property and bears all the expenses, in exchange for a higher annuity.
A viager sale can be annulled if the seller dies within twenty days of the contract from an illness they already had, if the element of chance is missing or if the annuity is derisory. If payments stop, the termination clause lets the seller take the property back.
The buyer may resell a property bought en viager during the seller's lifetime: the annuity remains due to the annuitant and the first buyer stays liable unless expressly released. When the buyer dies, the annuity debt passes to their heirs, who must keep up the payments.
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