Life annuity: Sell your property, stay in it and top up your pension

If your pension is too low in old age or you want to distribute your pre-existing inheritance, it is worth taking out a property annuity to gain more financial freedom. One variant of this is the life annuity. You can find out how it works here.

With a life annuity, owners sell their property - house or apartment - and receive an agreed monthly amount, the annuity, as well as a right of residence for life. This can be for life or for a fixed term. For the property seller, this means they can stay in the property without having to pay rent. The buyer, on the other hand, usually pays a monthly annuity to the seller. Sometimes the buyer also acquires the property with a one-off payment or a mixture of both payment options. Life annuities, which are paid as constant payments, apply for the lifetime of the seller. In contrast, there is the time annuity, where a period of time is specified for how long the annuity is paid.

The life annuity and right of residence are notarized and entered in the land register as a real charge. By transferring ownership, the buyer also assumes responsibility for the property. He undertakes to pay for any costs incurred, such as maintenance costs or property tax.

Reasons for the annuity

More and more property owners in Germany are discovering property retirement for themselves. There are many different reasons for this. Some want to indulge themselves once again, for example by traveling. Others, on the other hand, want to plan their inheritance early on. This makes sense, especially if there are several heirs. After all, it is difficult to divide a property. Cash, on the other hand, is easier to divide. Many property pensioners even have their grandchildren in mind and want to give them a good start in life, for example by investing the money for their studies.

How the pension is calculated

In order to know how much the property can be sold for, owners need to know exactly how much it is worth. Professional estate agents determine a fair market price. The annuity can then be calculated on this basis. However, the amount of the annuity still depends on which model the owner chooses. Life annuity or time annuity, annuity with or without one-off payment. There is freedom of contract.

Which revenue model is right for me?

The conditions under which you annuitize your property depend on your individual plans. Do you need a large sum of money? Would you like to fulfill a big dream? Would you like to distribute a large part of your inheritance to your children and grandchildren? Is your monthly pension already high enough to live well on? A real estate professional will advise you on which model is right for you. And they will help you find the right buyer.

Are you interested in annuitizing your property? Contact us now. We will be happy to advise you on your options.

Did not find what you were looking for:

https://www.handelsblatt.com/finanzen/immobilien/immobilienverrentung-mit-dem-eigenheim-das-einkommen-aufbessern/24577956.html?ticket=ST-247032-AfQjU7CD4XaWClYOs3Wr-ap1

https://www.pflegehilfe.org/immobilienverrentung

https://de.wikipedia.org/wiki/Immobilienleibrente

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

Photo: © ArturVerkhovetskiy/Depositphotos.com