Less known and rarer, the free life annuity allows the purchasers to make a rental investment or to acquire a principal residence.
In free life annuity, the property is sold in full ownership. From the moment of signature, the purchaser has the right of use. He can either occupy it (right of use, or usus), or rent it (right of renting, or fructus), or resell it (right of alienation, or abusus). In other words, he holds the bare ownership and the usufruct.
In the event of the death of the seller, the debirentiliser stops paying the annuity.
Because of the usufruct obtained at the time of the purchase, the purchaser in free life annuity cannot claim the discount (from 25 to 50%) which benefits the occupied life annuity, which corresponds to the cost of the right of use and dwelling (DUH) of the housing by the salesman. For the same property, its price is therefore higher than an occupied life annuity.
Advantages and disadvantages
For the seller:
- A higher sale price and a higher life annuity
- A tax deduction of up to 70% on the life annuity depending on the age of the buyer
- Complete exemption from taxes and charges on the property.
In return, the total loss of the enjoyment of the property for him as for his heirs directly after the signature of the notarial act.
For the purchaser:
The free life annuity is similar to an ordinary sale, except for the payment of a life annuity. The bouquet is paid in cash and the debirentier also supports all the charges and the expenses of maintenance or repairs of the good.
- If he rents the property, certain charges and taxes may be borne by his tenant.
- In the case of a purchase for resale, the result of the operation cannot be anticipated.