Live and Win: Discover the Benefits of Selling on an Annuity Basis

You have a beautiful home where you’ve lived for years. The walls tell stories, the garden brings back memories of countless summers and barbecues, and you know the neighborhood like the back of your hand. But now you’re looking for some extra income or financial security—without having to leave your beloved home. Here’s a twist: what if we told you this is possible without making any drastic changes? Meet the life annuity sale! Laurence Van Cutsem, our managing partner and master of notarial law, will explain everything to you in detail. 

What is a life annuity sale?

With a life annuity sale, the purchase price of your property is split into two parts. You receive an upfront lump sum—known as the “bouquet” ( usually 10 to 20%)—and the remainder is converted into a monthly annuity. This allows you to generate a stable, tax-free income to supplement your retirement savings. And the best part? You can continue living in your familiar home.

Who are the players?

There are three parties involved:

1. The party liable for interest ( the buyer)

2. The beneficiary ( seller)

3. The principal ( the person whose lifespan determines the term of the annuity; usually the seller, but sometimes a third party)

A life annuity sale is a contingent contract. The buyer pays a monthly amount for as long as the annuitant—or "the life"—is alive. For how long? That is the big question.

Why choose an annuity sale?

For the seller

• Extra income: A stable, tax-free supplement to your retirement income.

• Stay in your home: You don't have to leave your home.

• Higher returns: Often more profitable than putting money in a savings account, especially when interest rates are low.

But be careful!

• Selling to children or heirs can result in unexpected inheritance taxes and potential family disputes in the event of premature death.

• Your heirs will receive nothing after your death.

For the buyer

• Limited investment: You only pay the down payment when the deed is signed.

• Bargain opportunity: A chance to buy a home for less than market value.

• Good tenants: The sellers will continue to live in their home.

But ...

• The exact time of the seller's death is unknown, so you may end up paying more than you planned.

• Not tax-deductible.

• Early repayment is not permitted.

How is the annuity calculated?

The calculation of the monthly interest takes into account:

• The market value of the property

• The seller's age

• The seller's life expectancy

• The interest rate in effect at that time

• The package you have already paid for

Did you know that there are special tables to help you calculate life expectancy and interest rates?  

Do you have a home you love and want to enjoy some extra income at the same time? Selling your home on an annuity basis might be the solution you’re looking for. You turn your home into cash, benefit from your real estate savings, and you can continue living in your home. Stay smart, invest wisely!