From the value of a property to the bouquet and the annuity
A viager is not haggled over. It is calculated — from the value of the property, the seller’s age, and the right they keep.
Everything starts from the open-market value: what the property would fetch, empty and available. That is the only figure that comes from the property market; everything else comes from the contract and the actuarial tables.
From that value you then deduct the economic value of the right the seller keeps — the occupancy discount. What remains is the price the buyer actually pays. That price is finally split between a bouquet, paid in cash, and a capital sum converted into a life annuity.
Three settings, then, and a single slider for the seller: the larger the bouquet, the smaller the monthly annuity — and vice versa. It is a trade-off between cash now and regular income, and in the abstract there is no right answer.
The four stages of the calculation
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1. The open-market value
Assessed as for an ordinary sale: local market, floor area, condition, energy rating, location. An inflated value pushes up the annuity on paper and makes the property unsellable; an understated one leaves you poorer for life.
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2. The life expectancy applied
Read from the actuarial table according to the seller’s age and sex — and on two lives for a couple, where the term is that of the last survivor. It is this duration that sets both the discount and the rate at which capital converts into annuity.
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3. The occupancy discount
Nil in a free viager. In an occupied viager it depends on the right retained: a right of use and occupancy is not valued like a usufruct, since a usufructuary may let the property and the holder of a mere DUH may not. Reserving a usufruct therefore costs the buyer more.
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4. Splitting bouquet and annuity
You set the bouquet; the balance is converted into a monthly annuity at the rate corresponding to the term. The annuity is then indexed each year, and made reversionary to the spouse where a couple owns the property.
Which actuarial tables do we work from?
A viager rests on a life expectancy and on a conversion rate. Neither can be improvised: we work from several actuarial tables recognised by the profession, and in particular from the Daubry scale, the market reference for valuing life interests and economic usufruct, in its 2023 edition.
Our figures cross that reference with the most recent INSEE mortality tables and a longevity margin, so as not to understate how long a contract actually runs. We also use the tax scale in article 669 of the French tax code where the transaction requires it, knowing that it answers a fiscal rather than an economic logic: it does not give the same usufruct value and cannot serve as the basis for a market valuation.
A word of honesty about what an actuarial table is worth. It gives an average duration, not yours. A viager contract can run considerably shorter or considerably longer than the term applied: that is the element of chance, and it is what makes a viager an aleatory contract in the sense of the Civil Code. The table exists to share that uncertainty fairly between the parties, not to remove it.
That is why every study we hand over puts figures on the transaction, explains where they come from, and states the assumptions applied. No amount is given to you without its justification.
