THE FRENCH HOME REVERSION SCHEME

The French home reversion scheme has become very popular over the years. In France, many have already bought a viager (reversion) because you can invest in a property at a very attractive price.

Investing in a French home reversion scheme means you buy a property at a discounted price from a homeowner who is often retired. You will then become the legal owner of the property, however, you can only occupy it after the vendor passes away. This might sound a little odd, but currently 10.000 properties are sold as a reversionary property investment in France every year as it has a significant amount of advantages for the vendor and buyer.

The discount depends on the kind of reversion and its vendor. The determining factor is the age of the vendor(s) compared to the life-expectancy (which differs for men and women). But also location, the features of the property and whether it is occupied or vacant are important factors that determine the discount on the price of the viager. The younger the vendor, the larger the discount on the market valuation price. You can expect a discount of 40% if the vendor is over 80, and this discount can even be 50% if the vendor has just passed his or her 70s.

Most of the French home reversion properties are tenanted. However, a small percentage is not occupied by the vendor. You can then decide to use it yourself or to let it. The last option minimises the risk and is financially very advantageous: the rent can be used to cover the monthly reversionary annuities which have to be paid to the vendor.

The French term ‘viager’ originally comes from the word ‘viage’ which implied an uncertainty about the duration of life. Nowadays, reversions are a kind of bet on someone’s age: the duration of the vendor’s life.