Interview – David Chouraki, life annuity specialist
A new wind is blowing on the life annuity sector! The seller of a property who wishes to stay in his home and receive an immediate capital in order to realize an immediate project or to transmit his patrimony by anticipation can take advantage of this (very) advantageous alternative. Explanations by David Chouraki, Viager Manager at Consultant immobilier.
Life annuity, how does it work?
David Chouraki : In a classic life sale, the seller of a property receives additional income for life called the “life annuity”. This annuity is paid by the buyer to the seller, monthly, quarterly or annually. The amount of the annuity is defined according to criteria such as the age and life expectancy of the seller, the value of the property, or the estimated rental value of the property for sale.
On the day of the sale, the seller receives approximately 30% of the total amount of the sale called the bouquet. The balance of the sale amount will be paid as a life annuity.
Even if this solution seems attractive, insofar as it allows the seller to obtain both an immediate capital, and in addition, a complementary income, it has however an important disadvantage: the total value of the life annuity is uncertain, because it depends on the life span of the seller. A much more satisfactory alternative can be considered for the seller: zoom on the sale in bare ownership.