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Release money by selling en viager

If you need ready money and own a property in France then selling en viager may be an option that would allow you (and your partner) to continue living in the home and, also, to receive a regular monthly payment.

OFTEN overlooked by expats, a viager sale can mean a good deal for the buyer as well as financial security for the seller.

The typical kind is viager occupé, where the seller continues to live in the home. A value for the home is agreed – often through an estate agency, some of which specialise in viager services (called experts en viager) with payment from the buyer divided into an initial lump sum, called the bouquet, and followed with a regular monthly rent paid to the seller/s for their lifetime.

On the seller’s death the buyer takes possession of the home - meaning it ends up cheaper or more expensive depending on how long the seller lives.

Notaires can also advise on valuations and some take on the full ‘estate agency’ role. (As with any property sale a notaire needs to be involved in the formalities of the sale). Notaires have also helped launch a state-backed scheme CERTIVIA, which buys homes en viager, with a strong guarantee of regular rent payments in Paris, Paca, Lyon and other large urban areas (see certivia.fr).

The purchase value agreed should factor in a reduction due to the inconvenience to the buyer of the home being occupied and the amount of the rent is based on the seller’s life expectancy calculated by age and sex, using official tables. The aim is that a fair price will have been paid if the seller lives to the usual life expectancy figures.

In the case of a couple selling, the rent will usually continue until both members have died. The amount will take account of the fact that the agreement is sur deux têtes (literally, ‘on two heads’).

The contract often includes a clause that if the rent is not paid for a certain time the sellers may reclaim the property.

Sellers should note that the rent is taxable income but this is only after a reduction. If the seller is under 50 at the time of sale, 70% is taxable; up to age 59, 50%; to 69, 40%; then from 70, 30%.

One British reader from Normandy, who asked not to be named, said he and his wife are considering selling en viager because of debts they have incurred for renovations and concerns that, if one of the couple should die, the other’s pension would not cover the repayments.

The reader, who is in his seventies, said he was weighing up the potential impact on any inheritance he can pass on.

“Viager won’t protect the inheritance but it will protect us in the house and sort out the loan. I can either ask my children to help with the loan repayments if the worst happens, so they preserve their inheritance, or, the viager will pay off the loan and let us live here for the rest of our lives. Their upfront position is we should do whatever we have to do for ourselves but I need to talk through the implications with them.”

He has a quote from a specialist for his area, found with an internet search.

While a viager could be seen as prejudicial to them it may relieve children of the need to help needy parents financially under France’s obligation alimentaire laws (which in theory also apply in other countries including the UK).

Reader Julie Davies from the Var, said she and her husband bought their four-story village house this way, which ultimately enabled the sellers to pay high quality nursing home fees.

Mrs Davies, 59, said they bought in 1992, under an arrangement which allowed them to live in the upper two floors, which they previously rented.

“The old lady approached us about the idea. I didn’t understand but her doctor explained it to us. She was asking too much considering all the work that needed doing, so we made an offer. We worked out that with the bouquet and rental, if they both lived 25 years we would have paid the correct amount.”

She said the home ended up being good value because her husband, a builder, was able to do much of the renovation, keeping costs down, and the sellers died in the early 2000s. “From their point of view, we were there to help and used to take them to the shops when they stopped driving, and the rent topped up their pensions.

“We would visit the old lady in her nursing home, and the bouquet, which had been accruing interest in an account, paid all her fees.”

A viager occupé contract may state either that the seller retains a usufruit and can live in the home or rent it out; or retains only the right to use it themselves.

Other options include:

Viager libre – the seller vacates the property on completion of the sale

Vente à terme – the rent is paid for a fixed period, even to the seller’s heirs

Holiday viager – the seller agrees to move out for a set period every year

Sale of the nue-propriété - a large upfront sum and no rent, the seller retaining the usufruit.

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