Forward Sale

The typical sale agreement is another form of life annuity. It is distinguished from it by the time limit for payment of monthly installments. Thus, while the lifetime of monthly payments must be paid until the death of the vendor, monthly payments in a sale agreement is usually limited to 10 or 15 years.

This limitation depends on the age of the seller and the importance of the value of the property sold. The seller receives for life a right of use.

Tax

According to the legislation on the taxation of capital gains, the general scheme allows a full exemption of principal residences. This is the situation of the most vendors. On the other hand, unlike the life annuity which is taxable, monthly payments of a forward sale is exempt from taxes, which are not considered by the tax authorities as income property.

Indexing

The monthly payments resulting from a forward sale are indexed according to changes of the index INSEE of Construction, which ensures a high and progressive indexing as indexed to the raw materials (iron, copper, zinc, ect). Calculations of this index are graciously supported by the Life annuities Lapous.

Loads and work

The sale of an asset through a forward sale agreement implies at the signing of the act, a transfer of property in this way, the seller has not to bear the often significant costs arising from major repair of the building and payment of the tax. However, he pays the housing taxes in full.

Warranty

Guarantees are the same as for the life annuity: a first mortgage with a privilege of the seller and a subsequent action, which allows for non payment of the monthly payment by the buyer to cancel the sale and allow the seller to recover the full ownership of his property.

Sellers Psychology

Now we face a growing demand for retired people aged 65 to 75 years in which we seek to sell their property in life annuity in order to improve their standard of living.

However, we are unable to access their application in view of their young age. Indeed no buyer is willing to pay an annuity for more than fifteen years.

For such people, the sale agreement with limitation to 10 or 15 years of monthly payments is the only solution today.

This form of marketing, which enjoys the same safeguards that the life annuity is similar to the exclusive right to use and housing also made for life for the seller. But it is primarily to obtain more important mnthhly payments because the time limit. These are paid to heirs in case of premature death.

Buyers Psychology

I think the cumulative effect of three factors - longer life, increasing cost of living, the decline in the level of pensions - should help to generate interest in acquisitions in the forward sale . Benefiting also from a psychological advantage in that it implies no speculation on the life of the seller, the sale agreement seems to be a bright future.

It can plan its investment property as soon as it knows its acquisition cost. The deadline for payment of a forward sale may vary between ten and twenty years. Each situation depends primarily on the age of the sellers. The investor does not take any risk even if the seller lives longer. The term of payment is known by it. it is in fact a sale on credit, without any particular constraint, apart from the payment.