Free life or life annuity: what are the differences?
Free life, occupied life annuity: definitions and principles
What is the sale in life annuity?It is a question for the buyer (the enrollment) of buying a property without having to pay the entire sale price the day he acquires it.On the side of the seller (Le Crédirentier), the operation amounts to perceiving a monthly annuity until his death in return for the sale of his accommodation.
Buying a life annuity therefore consists in acquiring a property in the exchange of a starting capital (the "bouquet"), then the periodic payment of an annuity during the rest of the life of the seller.
A life annuity can be made in free life or an occupied life.
Free life annuity: the accommodation immediately available
In the case of free life annuity, the sale of property is carried out in full ownership.As soon as the sale is signed, the buyer has the good as he seems.In other words, his right of enjoyment is immediate.In the event of the seller's death, the enrollment stops paying the annuity.
It can either occupy it (right of use, or usus) as soon as the sale concluded, or rent it (right of rental, or fructus), or resell (right of alienation, or abuse) if therefind its interest.In other words, bare ownership and usufruct are concentrated in the hands of the only buyer.
However, the free life annuity cannot claim the discount (from 25 to 50%) from which the occupied life benefit, which corresponds to the cost of the right of use and housing of the housing by the seller.For the same good, its price is therefore mechanically higher than a occupied life annuity.Free life annuity sale often allows the seller to no longer have to get the management of real estate.
Occupied life annuity: the seller remains in the accommodation
If the Crédirentier (the Seller) retains a right of use and residential until his death, we speak of an occupied life as the sale is made on bare ownership.The denture (the buyer) who acquires real estate therefore cannot live there since he is occupied by the Crédirentier.
In other words: bare ownership goes to the buyer, while the Usus (right of use) and sometimes the fructus (enjoyment and usefulness) remain for the seller.The denture will have the enjoyment of its property only on the death of the seller or to the renunciation of his right of use (for example, in the case of a departure in retirement homes).
In return, the buyer benefits from a discount for occupation which will decrease the seller is elderly.De facto, the occupied life annuity is the most affordable formula.
The occupied life annuity is the most widespread formula, since it concerns the vast majority of life contracts.
Free life annuity, who pays the charges and taxes?
Free life annuity: no more load or load for the seller
What is the distribution of charges and taxes between the seller and the buyer in the case of a free life annuity sale?Here, the new owner freely has property, to occupy or rent it (he can also sell it).
We are there in an ordinary sales situation.The denture (the buyer, the one who pays the annuity) must bear all the rental charges (as defined by the decree of August 26, 1987), taxes and taxes.It is up to him that the maintenance expenses and the repairs of the property come from.In the event that he praises the property, the buyer can have certain charges and taxes supported by his tenant.
For its part, the creditor (seller) no longer has any charge to bear.He therefore no longer has to pay the property tax, the housing tax, major works, nor rental charges.
Occupied life annuity: charges and taxes distributed between seller and buyer
When the sale is made of occupied life annuity, a distribution of charges and taxes between the seller (Crédirentier) and the buyer (delegate).Since life annihilation is an over -the -counter sale, this distribution does not respond to specific rules.It is conventional according to the parties.The distribution of charges must be mentioned in the contract.Otherwise, it is articles 605 and 606 of the civil code that apply.
It is customary that the creditor keeps at its expense:
For its part, the denture is liable:
Free life annuity, occupied life: What about the bouquet and the rent?
Whether in a free life annuity sale or a busy life annuity sale, the credentials (seller) generally asks the detection (buyer) to pay a fixed sum at the time of the transaction ("the bouquet"), then of himPour regularly (monthly, quarterly or annually) a "life annuity" until the end of his life.
The contribution of the bouquet (which generally represents 20 to 30% of the value of the property) is not compulsory, but it appears in most life.If a bouquet is paid when signing the contract, its amount is deducted from the sale price to calculate the amount of the life annuity.
Regarding the life annuity, article 1976 of the Civil Code provides that it "may be made up of the rates that the contracting parties appeal to fix".Its amount is calculated, under the aegis of the notary, on the basis of the seller's life expectancy and according to the mortality tables for the life annuities established by INSEE.Other criteria come into play: the age of the seller, the value of the accommodation, the type of life annuity.Depending on the case, the annuity is indexed or not on the cost of living.It goes out on the day at the death of the Crédirentier.
The amount of the annuity is random, since the number of deadlines is, in principle, not known in advance (it is necessary to take into account the hazard of the life of the seller).If the property is occupied by the seller (this represents most of the Viageurs market), it is necessary to take into account the discount to be operated on the price of the housing at the time of the signing of the contract.
Free life annuity, occupied life annuity: discount or not a discount?
In most annuity sales, the seller (Crédirentier) remains in the accommodation.This is a busy life annuity.This means that the Buyer (degree) will only be able to occupy the property at the death of the seller only for the renunciation by the latter of his right of use.
On the other hand, due to the occupation of the property, the buyer benefits from a discount on the price of the property.This occupancy reduction is inversely proportional to the age of the seller.Thus, the discount can reach, for example, 30% if the seller is 90 years old and 50% if he is 70 years old.
Unlike an occupied life annuity, the free life life cannot claim the discount.No reduction linked to the rights of use and housing (DUH) is applied.
Free life, occupied life: what tax rules?
What taxation on the life annuity?
Whether free or occupied, the life annuity has particularities in terms of taxes.First of all concerning the life annuity perceived each year by the Crédirentier (seller), it is subject in all cases to income tax.But it is not the entire annuity that is concerned.A fraction of the life annuity is exempt.
The taxable part depends on the age of the seller at the time of signing the notarial deed.The more elderly the creditor, the less its rent is taxable.The table below establishes the tax rate of the life annuity according to the age of the seller.
| Fraction imposable de la rente viagère pour le rentier à la date du premier versement | |
|---|---|
| Âge du bénéficiaire de la rente | Parti imposable de la rente |
| Moins de 50 ans | 70% |
| De 50 à 59 ans | 50% |
| De 60 à 69 ans | 40% |
| À partir de 70 ans | 30% |
Example: for an annual annuity of 5.000 euros collected by a 67 -year -old person when they started to perceive this annuity, the taxable part amounts to 2.000 euros (that is to say 5.000 x 40%).
As for the purchaser (enrollment, the one who pays the annuity), he does not benefit from any tax advantage and cannot make any advantage in terms of income tax on the pension paid, whether in occupied life orfreely.
What taxation for capital gains?
Taxation on capital gains payable by the seller applies under the same conditions as a conventional real estate transaction (application of ordinary law conditions).But as the majority of the goods sold in life annuity concerns the main residence of the creditor, this allows it to be exempt from tax on added value (under article 150 U of the general tax code).
What about tax provisions surrounding the sale of his secondary life residence?The capital gain is calculated from the price set in the deed of sale.This price includes the amount of a possible bouquet as well as the capital value of the rent.If the credentials have owned its second home for twenty-two years or more, it is exempt from the part corresponding to income tax.In addition, he does not pay any capital gain tax if he has had good for thirty years or more.
What taxation for real estate wealth tax (IFI)?
Insofar as his life annuity corresponds to a claim on the Buyer (degree) -and not to a real estate asset -, the seller (Crédirentier) does not have to bring in the representative capital of the annuity in its taxable databaseReal estate wealth tax (IFI).On the other hand, if he has reserved the usufruct or the right of use and housing of the property (occupied life annuity), he is required to declare to the IFI the occupation value of the property.This is evaluated in accordance with the lump sum scale provided for in article 669 of the General Tax Code (CGI) according to the age of the usufructuary.
The table below details the scale of the tax assessment of the life-owner and bare ownership, depending on the age of the usufructuary.
| Viager : barème fiscal de l’évaluation de l’usufruit pour une déclaration à l’IFI | ||
|---|---|---|
| Source : article 669 du Code général des impôts (CGI) | ||
| Âge de l’usufruitier | Valeur de l’usufruit | Valeur de la nue-propriété |
| Moins de 21 ans | 90% | 10% |
| De 21 à 30 ans | 80% | 20% |
| De 31 à 40 ans | 70% | 30% |
| De 41 à 50 ans | 60% | 40% |
| De 51 à 60 ans | 50% | 50% |
| De 61 à 70 ans | 40% | 60% |
| De 71 à 80 ans | 30% | 70% |
| De 81 à 90 ans | 20% | 80% |
| À partir de 91 ans | 10% | 90% |
In the case of an occupied life annuity, and even if he does not yet have the enjoyment of the property, the buyer must declare the value of the bare ownership of the building.He can deduce from the declared value the representative capital of the rent.
What about the scenario of a free life annuity (without occupation of the accommodation by the seller)?The denture must declare to the IFI the entire value of the property.He must, in return, integrate into his liabilities deductible the capitalization value of the annuity he pays.
Transform a life annuity into a free life: how to do it?
As part of an occupied life anniversary, the seller (Crédirentier) has the possibility, when he wishes, to release his property.This therefore corresponds to transforming the life annuity occupy into a free life annuity.This opportunity arises when the seller decides to live with a member of his family, to settle in a retirement home or to integrate a medical residence of the EHPAD type.He then abandoned his right of use and housing (DUH).The seller is required to notify his buyer (degreet) before his departure from the accommodation.
Please note: everything must be finalized at the time of signing the authentic act before the notary.It is necessary to plan, in the act, a clause of abandonment of enjoyment of the property at any time of the seller's own head.In this case, this anticipation release clause must indicate the amount of the increase in the annuity to be paid by the buyer who then finds the total enjoyment of the property (he can live or rent him).In general, this increase reaches 30% of the amount of the life annuity.It is fixed contractually in the life contract.
The creditor must agree with the detection so that it bought its usufruct (in the form of capital or rent).It must be an agreement between the two parties, and not a constraint imposed on the denture.
Please note: renunciation of the right of use and housing must be unequivocal due to the irrevocable nature of the abandonment of the Duh.
Occupied life annuity, free life annuity: advantages and limits
The advantages and limits of the annuity occupied for the seller
The occupied life annuity has a number of advantages for the seller.This solution allows him:
In terms of disadvantages for the creditor, let us quote:
The advantages and limits of the annuity occupied for the buyer
On the buyer's side, the busy life annuity can be interesting insofar as:
On the other hand, by opting for the occupied life annuity, the detection:
The advantages and limits of free life annuity for the seller
Less known than the occupied life annuity, the free life annuity is also intended for people who wish to make a rental investment or acquire a main residence.And as with the occupied life annuity, the person who chooses the sale in free life must be aware of the advantages and disadvantages of this option.
On the advantage side for the Videntier, let us quote:
On the other hand, the free life annuity has some inconvenience for the seller:
The advantages and limits of free life annuity for the buyer
For the detection also the free life annuity has its good and less good sides.
Here is a non -exhaustive list of the advantages that this option for the buyer presents:
On the side of the disadvantages for the detection, we can evoke:
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