Life Annuity FAQ

Occupied life annuity: You sell your property but keep the right to live there until your death. The annuity is lower (25-35% discount) but you stay in your home.

Vacant life annuity: You sell and immediately free up the home. The annuity is maximal (no discount) but you must move out. Ideal if you wish to change your life or be closer to your family.

65-72 years: Both options are viable. The choice depends on your life plans.
73-80 years: The vacant life annuity becomes financially more advantageous.
80+ years: The vacant life annuity offers a significantly higher annuity and can finance a quality care home.

Yes, absolutely! The life annuity on two heads is common. The calculation is based on the life expectancy of the younger spouse, which slightly reduces the annuity but offers optimal security. If one spouse dies, the survivor continues to receive the full life annuity.

Technically possible but very rare in Luxembourg. It is generally more advantageous to sell the whole property via life annuity and invest part of the bouquet according to your needs. Our expert can study your specific situation.

The calculation follows this formula:
1. Market value of the property (expert estimate)
2. Minus the occupancy discount (0% for vacant, 25-35% for occupied)
3. Minus the bouquet (10-30% depending on negotiation)
4. Divided by life expectancy according to actuarial tables
5. Adjusted according to the life annuity rate (3-7%)

Example: Apartment €600k, woman 73 years, vacant life annuity = about €2,400/month.

The bouquet is a capital sum paid in cash at signing. It usually represents 10 to 30% of the annuity value.

Advantages: Immediate liquidity, financial security, possibility of gifts during your lifetime.
Disadvantages: Monthly annuity reduced accordingly.

The choice depends on your needs: liquidity vs regular income. Our expert advises you according to your situation.

Yes, mandatorily! In Luxembourg, the life annuity must be automatically indexed to the change in the cost of living. This clause is written into the contract and protects you against inflation. Indexation follows the official index published by STATEC.

That is the whole advantage of the life annuity! Your annuity is guaranteed for life, even if you live 20 years longer than the average life expectancy. The buyer takes this longevity risk. The longer you live, the more advantageous the life annuity becomes for you.

Absolutely! The amount of the annuity results from a negotiation between you and the buyer. You can adjust:
• The amount of the bouquet (more bouquet = less annuity)
• The life annuity rate applied
• The additional guarantees
• The allocation of charges (in an occupied life annuity)

Our expert negotiates to obtain the best conditions.

Yes, very secure! The life annuity is governed by the Luxembourg Civil Code which specifically protects senior sellers:
• Notary's duty to advise
• Extended withdrawal period
• Nullity of abusive clauses
• Automatic legal mortgage
• Recourse in case of non-payment

In addition, our legal expert checks all aspects before signing.

After final signing at the notary, cancellation is only possible in case of:
• Defect of consent (fraud, error, duress)
• Non-payment of the annuity (resolutory clause)
• Nullity for legal cause

This is why we insist on the importance of the cooling-off period and prior legal advice.

Several protections cover you:
1. Legal mortgage on the property (payment priority)
2. Resolutory clause (automatic recovery of the property)
3. Additional guarantees (surety, life insurance)
4. Accelerated legal recourse

In practice, with our rigorous selection of buyers, this risk is almost nil.

Yes, mandatorily! The life annuity sale is an authentic deed that must be signed before a notary. The notary:
• Verifies the legality of the operation
• Ensures your informed consent
• Registers the guarantees in the land register
• Keeps the authentic deed

We work with notaries specialised in life annuities.

In Luxembourg, the life annuity benefits from a very advantageous tax regime:
• Life annuity: Taxable only on a fraction according to your age (30% at 70, 10% at 80+)
• Bouquet: Exempt from tax (considered the sale price)
• Capital gain: Exempt if main residence for 2+ years

Example: annuity of €2,000/month at 75 = only €400 taxable.

No! This is a major advantage of the life annuity:
• The property is no longer in your estate (already sold)
• No inheritance tax on the property
• Your heirs only pay on any liquidity
• Significant optimisation of transmission

Your family often saves €50,000 to €200,000 in inheritance tax.

Several optimisation strategies:
1. Maximise the bouquet (non-taxable) vs the annuity
2. Spread the sale over 2 tax years if possible
3. Plan gifts during your lifetime with the bouquet
4. Coordinate with your estate planning

Our tax expert studies your overall situation.

Your children will inherit:
• Any liquidity (unspent bouquet, savings)
• Your other assets (not sold via life annuity)
• The life insurance policies taken out

They do NOT recover the property sold via life annuity (already sold), but save the corresponding inheritance tax. Often, the net inheritance is equivalent or higher, and you have benefited from the annuity during your lifetime.

Legally, no. You are free to sell your property as you wish. However, we strongly recommend informing your family because:
• Family transparency preserves relationships
• They can advise you objectively
• It avoids future surprises and conflicts
• It allows planning the optimisation together

Our expert can support you in this family discussion.

No, your children cannot oppose your decision to sell via life annuity, except in very exceptional cases:
• Legal protection measure in progress
• Manifest defect of consent
• Situation of abuse of weakness

You are the owner and free to sell. The life annuity is no different from a conventional sale in this respect.

Yes, an excellent strategy! The bouquet allows you to make gifts during your lifetime:
• Family gift of €100,000 exempt per child every 15 years
• Reduction of future inheritance tax
• The pleasure of seeing your loved ones benefit during your lifetime
• Overall tax optimisation

We coordinate with your notary to optimise this strategy.

On average 4 to 8 months:
1-2 months: Valuation, file, buyer search
1-2 months: Negotiation, agreement in principle
1-2 months: Checks, preliminary contract
1-2 months: Finalisation, notary signing

The timeframe varies depending on the complexity of the file and the buyer's requirements. We keep you informed at every step.

Essential documents:
• Title deed and mortgages
• Recent technical surveys
• Latest charges invoice (co-ownership)
• Urban planning certificate if recent works
• ID and family record book
• Latest tax assessments

Our team guides you to put together the complete file.

Yes, until the final signing at the notary, you can withdraw without penalty. After signing the preliminary contract, you still have an 8-day withdrawal period.

We encourage this reflection and never pressure our clients. A life annuity decision must be carefully considered.

Priority selection criteria:
1. Solvency and financial guarantees
2. Amount of the annuity and the bouquet
3. Contractual conditions (charges, works)
4. Speed and simplicity of the process
5. Personal rapport with the buyer

Our expert presents you with a detailed comparative analysis.