Life Annuity
Property sale where payment is made in the form of an annuity paid to the seller until their death, with or without an initial bouquet.
Full definition
The life annuity is a unique form of property transaction in which the buyer (annuity debtor) purchases a property by paying a periodic annuity to the seller (annuitant) until the latter's death. This arrangement may include an initial payment known as the "bouquet".
The life annuity has existed since the Middle Ages and represents an advantageous solution for both parties: the seller benefits from a supplementary income throughout their life, while the buyer acquires a property at a price often below market value.
In Luxembourg, the life annuity is gaining popularity as a wealth solution for senior homeowners wishing to improve their standard of living while remaining in their home. This transaction is governed by the Luxembourg Code civil and requires the involvement of a notary.
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Related terms
Occupied Life Annuity
Sale via life annuity where the seller retains the right to live in the property (right of use and habitation or usufruct) until their death.
Vacant Life Annuity
Sale via life annuity where the buyer can occupy or let the property immediately after the purchase.
Bouquet
Capital sum paid to the seller on the day the deed of sale via life annuity is signed, generally between 20% and 40% of the property's value.
Life Annuity (the pension)
Sum paid periodically (monthly or quarterly) to the seller until their death, calculated according to the value of the property and life expectancy.
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