Life annuity sale

A life annuity sale (viager) is a property sale where the buyer pays a lump sum (bouquet) and a monthly or quarterly annuity to the seller until their death. In Belgium, it represents less than 1% of transactions but interest is growing with an aging population. <h3>Occupied vs free life annuity</h3> <p>The <strong>occupied life annuity</strong> is most common (about 80% of cases): the seller retains the right to live in the property. The buyer benefits from a 25-50% discount on the property value, calculated based on the seller's life expectancy.</p> <p>The <strong>free life annuity</strong> allows the buyer to occupy or rent the property immediately. The annuity is higher as there is no occupation discount.</p> <h3>Price calculation</h3> <ul> <li><strong>The bouquet</strong>: lump sum paid at signing, typically 20-30% of the property value. For a EUR 300,000 property, the bouquet would be EUR 60,000-90,000.</li> <li><strong>The annuity</strong>: monthly payment calculated on the residual value divided by the seller's life expectancy in months.</li> </ul> <h3>Taxation in Belgium</h3> <ul> <li><strong>Registration fees</strong>: calculated on the fair market value. In Wallonia/Brussels 12.5%, in Flanders 3% for primary residence.</li> <li><strong>For the seller</strong>: the annuity is not taxable as property income — a major tax advantage compared to traditional renting.</li> </ul> <h3>Benefits and risks</h3> <p><strong>For the seller:</strong> regular retirement income, continued residence, no taxation on the annuity.</p> <p><strong>For the buyer:</strong> acquisition at reduced price (25-50% discount), no bank loan required, long-term wealth building. The main risk is the life contingency: if the seller lives longer than expected, total cost may exceed market value.</p>