What tax applies to the buyer of a viager property?
Tax close to that of an ordinary purchase — with several particularities worth knowing before you commit.
Buying a property in viager follows, in principle, the same tax rules as a traditional purchase. The buyer becomes the owner and must pay the acquisition costs commonly called "notary fees", which include transfer duties, disbursements and the notary’s own remuneration.
The tax treatment of a viager purchase nevertheless has several particularities. Here they are, in the order in which they arise.
Quels frais de notaire ?
La base de calcul dépend de la structure juridique de l’opération.
En viager occupé
Le vendeur conserve un droit d’usage et d’habitation ou un usufruit selon les modalités prévues au contrat. La valeur économique de ce droit vient diminuer la valeur taxable retenue pour l’acquisition.
Les frais d’acquisition sont donc calculés sur la valeur occupée du bien, c’est-à-dire sur le prix effectivement payé par l’acquéreur : bouquet augmenté de la valeur capitalisée de la rente viagère lorsque celle-ci existe et non sur la valeur libre du bien. Cette décote liée à l’occupation permet généralement de réduire le montant des frais d’acquisition par rapport à une vente classique.
En viager libre
Le bien est immédiatement disponible. Les frais de notaire sont calculés sur le prix de vente mentionné dans l’acte authentique, comme dans une vente immobilière classique.
Is the life annuity tax-deductible?
No. Annuities paid to the seller under a viager acquired privately are not deductible from the buyer’s taxable income, except in certain situations that need to be looked at case by case with our help.
Does the buyer pay the property tax?
That depends entirely on the clauses of the notarial deed. A viager rests on freedom of contract: the parties are free to organise how charges are shared. In practice, some contracts put the property tax on the buyer as owner, particularly in free viagers; others leave it partly or wholly with the occupying seller, particularly in bare-ownership sales.
Who pays the residence tax?
Since the residence tax on main homes was progressively abolished, it is no longer payable in most situations. Where it still applies — for certain second homes, or in particular cases provided for by law — it is due from whoever occupies the property on 1 January of the tax year. In an occupied viager it therefore generally falls to the seller who continues to live there.
What other charges should be anticipated?
Beyond the acquisition costs, an investor has to build several expenses into their analysis. Depending on the clauses of the contract, they may bear:
- the major repairs listed in article 606 of the Civil Code;
- works voted by the owners’ association that fall to the owner;
- certain insurance premiums, where the contract so provides;
- managing-agent fees corresponding to the owner’s charges;
- the property tax, according to how the deed allocates it.
At Viagéo Patrimoine, every project is the subject of a financial study estimating the total cost of the investment over its whole expected life.
Is the buyer taxed on the benefit of the discount?
No. Acquiring an occupied viager at a discount reflecting the right of use and occupancy or the usufruct the seller keeps is not a taxable benefit. The discount is the counterpart of the buyer’s inability to use the property immediately: it is neither income nor a taxable advantage.
Does the property count towards French wealth tax?
Where the buyer’s net property wealth exceeds the threshold for the French property wealth tax, the rules differ according to the rights the seller has kept. Where a usufruct is reserved, it is in principle the usufructuary who remains liable on the full-ownership value of the property, subject to exceptions provided by law. Where the seller keeps only a right of use and occupancy, the position is different and needs its own analysis. A tailored estate study is therefore essential.
No questions in this category.
An estate investment, not a tax shelter
Buying a property in viager is first and foremost a long-term estate investment. While it offers economic advantages tied to acquiring assets gradually, it gives no particular tax relief on the annuities paid.
Before any acquisition it is essential to work through the real cost of the investment, the allocation of charges and works, the tax implications (wealth tax, property tax, acquisition costs, the annuity’s non-deductibility) and the long-term consequences for your estate.
At Viagéo Patrimoine we carry out a full estate study before every acquisition, so that the investment is secure and our clients decide with their eyes open.
This page sets out the applicable framework as general information. It does not replace the analysis of your notary or tax adviser.
