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Reversion Property FAQ

What is Reversion Property in France? The French social and economic environment is strongly favouring the reversionary property market. Pensioners can no longer live on their pensions and require an additional source of income. There are over 10,000 reversionary transactions made in France each year. The types of properties range from studio flats to apartments, villas and commercial properties. They are located in attractive areas such as Paris and its close suburbs, the French Riviera and the Atlantic

Excellent investment opportunity

  Medium to long-term horizon

  Possibility to buy property at a huge discount

  Most properties located in prime areas

  Portfolio diversification

  No capital gain tax when property reverts to the buyer

  Reduced notary fees

Target Investors

  Institutional investors

  Affluent individuals planning for their retirement

  Foreign investors who want a holiday home in France in the medium to long-term horizon

How does it work?

There are two types of reversion properties: tenanted or vacant, and different payment structures and discounts. In French,

There are two broad types of viager:

  Viager occupé

  Viager libre

Viager occupé agreements account for around 90% of all such sales and involve the vendor (crédirentier) occupying the property until death.

Viager libre agreements allow the purchaser (débirentier) to take possession of the property immediately.

Tenanted property 
More than 90% of all reversion properties are tenanted, i.e. the vendor lives in the premises until he or she leaves the property to go to a care home or passes away. 30% of the tenanted properties are vacant before the vendor passes away and buyers can then live in the property or rent it out.

Vacant property 
The vendor does not live in the premises and the buyer can live in the property or rent it out, which maximises return as the rents cover the monthly payments to the vendor.

Payment Structures 
There are three different ways of buying a reversion property:

1.By paying a lump sum plus a monthly annuity

2.By paying a lump sum, but no annuity

3.By paying a monthly annuity only, and no lump sum

Legal explanation:Rights and Obligations of the Buyer

  Buyer becomes owner on the day of the exchange of the title deeds

  Buyer pays for any major works done as well as for the land tax

  Buyer can sell the property whenever, without the approval of the Vendor

  Buyer can use the premises if the vendor decides to leave the property

  Buyer can take insurance policies to limit excess of life expectancy of the Vendor

Rights and Obligations of the Vendor

  Vendor has the use of the property, but cannot rent it

  Vendor will pay for the service charges, council tax and maintenance

  The contract cal be called off in the following circumstances:

  The Vendor dies within the following 20 days after the exchange

  The selling price is too low (i.e. to avoid inheritance tax)

  The buyer knew that the vendor had an incurable disease when he bought the property

Costs / Fees 
Notary fees: 3% of market value

How long does it take? 
It generally takes about 6 months to complete.

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