{"id":6824,"date":"2024-06-14T14:45:53","date_gmt":"2024-06-14T12:45:53","guid":{"rendered":"https:\/\/www.appartement.be\/buying-home-on-annuity-everything-you-need-to-know\/"},"modified":"2024-06-14T14:45:53","modified_gmt":"2024-06-14T12:45:53","slug":"buying-home-on-annuity-everything-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.appartement.be\/en\/buying-home-on-annuity-everything-you-need-to-know\/","title":{"rendered":"Buying home on annuity: Everything you need to know"},"content":{"rendered":"<p><em>Buying on annuity is an alternative way of buying and selling real estate. What is it right? What types exist? What is the progression? Find out here!    <\/em><\/p>\n<h2>Contents<\/h2>\n<ul>\n<li>What is &#8220;buying on annuity&#8221;?<\/li>\n<li>Types of buying on annuity\n<ul>\n<li>Free annuity (rente viag\u00e8re libre).<\/li>\n<li>Occupied annuity (rente viag\u00e8re occup\u00e9e).<\/li>\n<li>Annuity with temporary right of residence<\/li>\n<\/ul>\n<\/li>\n<li>What should you consider before you buy on annuities?<\/li>\n<li>Advantages of buying on annuity<\/li>\n<li>Disadvantages of buying on annuity<\/li>\n<li>The course of an annuity agreement (6 steps)<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2>What is &#8220;buying on annuity&#8221;?<\/h2>\n<ul>\n<li>In buying on annuity, the buyer buys a property from the seller, where payment is not made all at once, but in the form of periodic payments (= the annuity) to the seller.<\/li>\n<li>Typically, people combine the annuity installment with an initial lump sum payment called a &#8220;bouquet.&#8221;<\/li>\n<li>The seller usually continues to live in the property for a predetermined period of time or for life.<\/li>\n<li>In addition to paying for the annuity and any bouquet, you also pay <a href=\"https:\/\/www.appartement.be\/kosten-aankoop-huis-of-appartement\/\">registration fees<\/a> when you sign the notarial deed. The signing occurs when the contract is recorded, not when the seller dies. <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2>Types of buying on annuity<\/h2>\n<h3><strong>Free annuity (rente viag\u00e8re libre).<\/strong><\/h3>\n<ul>\n<li>The seller sells the property and leaves it immediately.<\/li>\n<li>The buyer immediately occupies or rents the property.<\/li>\n<li>The buyer pays a periodic annuity to the seller until the seller&#8217;s death.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Occupied annuity (rente viag\u00e8re occup\u00e9e).<\/strong><\/h3>\n<ul>\n<li>The seller sells the home, but continues to live in it for life.<\/li>\n<li>The buyer takes possession of the property only after the seller&#8217;s death.<\/li>\n<li>The buyer pays a lower annuity because the seller retains the right of residence.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Annuity with temporary right of residence<\/strong><\/h3>\n<ul>\n<li>The seller continues to live in the property for a specified, agreed-upon period of time.<\/li>\n<li>After this period, the buyer occupies the property.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2>What should you consider before you buy on annuities?<\/h2>\n<ul>\n<li>The age and health of the seller. The annuity is calculated based on the life expectancy of the seller. The older the seller, the higher the annuity usually is.  <\/li>\n<li>Property value. Estimate market value of property to determine a fair annuity. <\/li>\n<li>The duration of the installment: Sometimes puts a maximum duration on the installment of the annuity. This duration depends on the seller. For example, it can mean 15, 20 or even 25 years.  <\/li>\n<li>The amount of the bouquet. Consider the amount of the first lump sum payment. If you pay a higher bouquet, the annuity is often lower.   <\/li>\n<li>Contract terms. Make sure the contract is clear and detailed. Make clear agreements about payment terms, maintenance of the property and what happens in the event of the seller&#8217;s or buyer&#8217;s untimely death.  <\/li>\n<li>The tax aspect. Annuity income may be taxed as retirement income. Get tax advice from your accountant.  <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2>Advantages of buying on annuity<\/h2>\n<ul>\n<li>The <strong>seller<\/strong> has financial security. He\/she receives a fixed monthly income, potentially contributing to a more comfortable old age. <\/li>\n<li>With an occupied annuity, the <strong>seller<\/strong> continues to live in the home for life, providing security of housing.<\/li>\n<li>The <strong>buyer<\/strong> pays lower initial costs (bouquet) compared to a regular home purchase. So you need less equity. In some cases, you don&#8217;t even need a <a href=\"https:\/\/www.appartement.be\/hypothecaire-lening\/\">mortgage loan<\/a>.  <\/li>\n<li>In addition, the <strong>buyer<\/strong> usually pays a maximum total of 75% of the home&#8217;s market value.<\/li>\n<li>The <strong>buyer<\/strong> may enjoy a capital gain on the home. If the seller has a long life, the total purchase price is sometimes less than the final market value of the home. <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2>Disadvantages of buying on annuity<\/h2>\n<p>The buyer and seller determine the value of the home in advance.<\/p>\n<ul>\n<li>Does the property become worth more? Then the <strong>seller<\/strong> cannot suddenly ask for a much higher price. However, the annuity may be <a href=\"https:\/\/www.appartement.be\/hoe-werkt-huurindexering\/\">indexed<\/a> provided you include this in the contract.  <\/li>\n<li>Does the seller live significantly longer than initially expected? If so, it could be quite costly to the <strong>buyer<\/strong>. <\/li>\n<li>As long as the seller continues to live, you should continue to pay as a <strong>buyer<\/strong>. Even if you are in financially difficult situations. <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-3961\" src=\"https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet-1024x576.png\" alt=\"Home buy on annuity buy on tablet\" width=\"800\" height=\"450\" srcset=\"https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet-1024x576.png 1024w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet-300x169.png 300w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet-768x432.png 768w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet-1536x864.png 1536w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente-kopen-op-tablet.png 1920w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h2>The course of an annuity agreement<\/h2>\n<h3><strong>Step 1: Determine the value of the property<\/strong><\/h3>\n<ul>\n<li>A licensed real estate expert inspects the property for <a href=\"https:\/\/www.appartement.be\/epc-residentiele-eenheid\/\">EPC<\/a>, maintenance, location, amenities and needed renovations.<\/li>\n<li>Then this expert determines the value of the property. He\/she provides you with a report, with an objective valuation that forms the basis for negotiations. <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Step 2: Calculate the annuity<\/h3>\n<ul>\n<li>The same or different expert determines the annuity based on the estimated value of the home, the age and age expectation of the seller and the type of contract.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Step 3: Negotiate terms and draft the contract<\/strong><\/h3>\n<ul>\n<li>Discuss and negotiate the terms with the seller and draft a watertight contract with the help of a notary.<\/li>\n<li>Determine:\n<ul>\n<li>The bouquet.<\/li>\n<li>Annuity payments.<\/li>\n<li>Length of installment payments.<\/li>\n<li>The rights and maintenance obligations of the buyer and seller.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Step 4: Register the contract<\/strong><\/h3>\n<ul>\n<li>Make the agreement official with a notary public. Sign the contract. He\/she will ensure that the contract is properly recorded.  <\/li>\n<li>Upon signing, the buyer (unless otherwise agreed) pays the <a href=\"https:\/\/www.appartement.be\/kosten-aankoop-huis-of-appartement\/\">registration fees<\/a> and <a href=\"https:\/\/www.appartement.be\/notariskosten-aankoop-huis-of-appartement\/\">notary fees<\/a>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Step 5: Pay or in periodic payments<\/strong><\/h3>\n<ul>\n<li>After signing the notarized deed, the buyer must make annuity payments according to the contract terms.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Step 6: The seller dies<\/strong><\/h3>\n<p>The last step of buying on annuity, is that the seller dies. In this process, the following happens: <\/p>\n<ul>\n<li>Periodic payments end automatically.<\/li>\n<li>Any outstanding payments expire and the buyer is the final owner of the property with no further financial obligations.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-3960\" src=\"https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet-1024x576.png\" alt=\"Home buy on annuity_ sell on tablet\" width=\"800\" height=\"450\" srcset=\"https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet-1024x576.png 1024w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet-300x169.png 300w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet-768x432.png 768w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet-1536x864.png 1536w, https:\/\/www.appartement.be\/wp-content\/uploads\/2024\/06\/Woning-kopen-op-lijfrente_-verkopen-op-tablet.png 1920w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>Sources: <a href=\"https:\/\/www.tijd.be\/netto\/analyse\/vastgoed\/woning-kopen-op-lijfrente-als-alternatieve-investering\/10438687.html\" target=\"_blank\" rel=\"noopener\">Time<\/a>, <a href=\"https:\/\/www.wikifin.be\/nl\/woning-en-hypothecaire-lening\/woning-kopen-bouwen-verbouwen\/een-woning-kopen\/wat-een-aankoop-op\" target=\"_blank\" rel=\"noopener\">Wikifin<\/a>, <a href=\"https:\/\/www.zimmo.be\/blog\/2023\/12\/21\/de-voor-en-nadelen-van-kopen-met-lijfrente\/\" target=\"_blank\" rel=\"noopener\">Zimmo<\/a><\/p>\n<div class=\"elementor-widget-container\"><b>Would you like to cite this article as a source? Then use: <\/b><\/div>\n<div class=\"elementor-widget-container\"><i>Stiasteny, L. (2024, June 14). Buying home on annuity: everything you need to know. Apartment.com. Consulted on (date XX\/XX\/202X), from https:\/\/www.appartement.be\/alles-overkopen-op-lijfrente   <\/i><\/div>\n<div><\/div>\n<div><\/div>\n<div><strong>Related articles:<\/strong><\/div>\n<ul>\n<li><a href=\"https:\/\/www.appartement.be\/5-soorten-woonleningen\/\">5 types of home loans<\/a><\/li>\n<li><a href=\"https:\/\/www.appartement.be\/vlaamse-woonwaarborg-wetgeving\/\">Conditions of the Flemish Housing Guarantee<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Buying on annuity is an alternative way of buying and selling real estate. What is it right? What types exist? What is the progression? Find out here! Contents What is &#8220;buying on annuity&#8221;? Types of buying on annuity Free annuity (rente viag\u00e8re libre). Occupied annuity (rente viag\u00e8re occup\u00e9e). Annuity with temporary right of residence What [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":6214,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1120],"tags":[1121,2005],"class_list":["post-6824","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buy","tag-buy","tag-buy-on-annuity"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/posts\/6824","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/comments?post=6824"}],"version-history":[{"count":0,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/posts\/6824\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/media\/6214"}],"wp:attachment":[{"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/media?parent=6824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/categories?post=6824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.appartement.be\/en\/wp-json\/wp\/v2\/tags?post=6824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}