Selling en Viager (Life Annuity) in Luxembourg: Benefits and How It Works

The viager sale (life annuity property sale) is a still little-known option in Luxembourg that can prove highly advantageous for senior homeowners. This mechanism lets you sell your property while receiving a regular income and, in the case of an occupied viager, keeping the right to live in it.

What is a viager sale?

A viager sale is a contract whereby the seller (the crédirentier, or annuitant) transfers their property to a buyer (the débirentier) in exchange for:

• A bouquet: a lump sum paid in cash at signing (usually 20-30% of the property's value)
• A life annuity: a monthly or quarterly payment made until the seller's death

Occupied viager vs free viager

Occupied viager

The seller retains a right of use and habitation (droit d'usage et d'habitation) over the property. The buyer can only take possession upon the seller's death. The price is reduced by the value of this right of use (a 30-50% discount depending on age).

Free viager

The buyer can occupy or rent out the property immediately. The bouquet and annuity are therefore higher, as there is no occupancy discount.

Calculating the bouquet and the annuity

The calculation is based on three parameters:

1. The market value of the property (valuation at market price)
2. The seller's life expectancy (INSEE mortality tables)
3. The occupancy discount (in the case of an occupied viager)

Example for a €600,000 property, 75-year-old seller, occupied viager:

• Value after occupancy discount: ~€360,000
• Bouquet (30%): €108,000
• Monthly annuity: ~€1,800

Viager taxation in Luxembourg

The tax treatment is favourable for the seller:

• The bouquet is treated like a standard sale price (subject to property capital gains tax)
• The life annuity benefits from a tax allowance based on the seller's age when the annuity payments begin
• Only a fraction of the annuity is taxable (30% for a seller aged 70 or over)

Advantages for the seller

• Guaranteed regular income for life
• Staying in the home (occupied viager)
• Favourable taxation of the annuity
• Immediate capital through the bouquet
• Protection against inflation (indexed annuity)

Precautions to take

Before selling en viager, make sure you:

• Have your property valued by a professional
• Consult a specialised notary (see our guide to the compromis de vente (preliminary sales agreement))
• Include a termination clause in case the annuity is not paid
• Provide for the annuity to be indexed to the cost of living

FAQ

From what age can you sell en viager?

There is no legal minimum age, but in practice a viager sale becomes worthwhile from age 70. The older the seller, the higher the annuity and the larger the bouquet.

What happens if the buyer dies before the seller?

The obligation to pay the annuity passes to the buyer's heirs. The seller continues to receive the annuity as normal.

Is the viager common in Luxembourg?

The viager remains marginal in Luxembourg (less than 1% of transactions), but it is gaining popularity as the population ages and property prices remain high.