Life annuity in Geneva: amount, guarantees, taxation and calculator

A property life annuity is the periodic sum paid by the buyer to the seller of a home in return for the sale of the property, until the seller's death, generally in addition to an initial capital payment known as the bouquet.

A second product, the insurance life annuity, wrongly bears the same name and works the opposite way: instead of receiving a capital sum, the annuitant pays one in.

This article covers the amount of the annuity, its parameters and the discount on an occupied viager, then the payment guarantees, the end of the annuity, its taxation and the type of seller this method of sale suits.

What is a property life annuity?

A property life annuity is the part of the price of a home converted into periodic payments, which the buyer pays to the seller until the latter's death.

The seller transfers ownership through registration in the land register, which is applied for on the basis of the notarial deed, and receives two things in return: an immediate capital sum, the bouquet, and the annuity. The Code of Obligations calls the two parties the creditor and the debtor of the annuity; in practice they are called the annuitant (crédirentier) and the payer of the annuity (débirentier).

The insurance life annuity works the other way round: article 520 of the Code of Obligations exempts it from the rules of articles 516 to 519 and refers it to the Federal Act on Insurance Contracts. The table contrasts the two products on six points.

Criterion	Insurance life annuity	Life annuity in a property viager
Capital paid at the outset	The annuitant pays a premium to the insurer	The buyer pays a bouquet to the seller
Recipient of the annuity	The policyholder	The seller of the home, the annuitant
Source of the funds	The annuitant's existing savings	The price of the property sold
Payer of the annuity	A life insurance company	The buyer, an individual or an investor
Fate of the home	Outside the contract, unchanged	Transferred to the buyer, encumbered by a right of residence where the seller stays in the property
Target profile	Holder of capital to convert into income	Owner of a home to convert into income

The first product consumes savings already held, the second monetises a home.

How is the price split between the bouquet and the annuity?

The price of a viager is most often split between a bouquet paid on signing and a periodic annuity paid until the seller's death, the sum of the two making up the agreed price.

Nothing obliges the parties to provide for a bouquet, and the whole of the price can be converted into an annuity. The split is made from the market value of the property, its price on the open market. A seller who stays in the property keeps the use of it, and that use is deducted from the market value to give the occupied value.

It is this occupied value that is split: the bouquet is taken from it first, and only the balance is converted into an annuity. The relationship between the two components is inverse and arithmetical: every franc added to the bouquet removes one franc from the converted capital, and the periodic amount falls by that franc divided by the life annuity factor applied.

This diagram walks through the calculation, from the market value of the property to the annuity, and shows why a higher bouquet lowers the periodic amount.

No legal rule dictates any proportion between these two parts. The Swiss Code of Obligations leaves the parties free to determine the subject matter of the contract (art. 19) and the sale price (art. 184), and its articles 516 to 520 on the life annuity prescribe no ratio between the two.

Market practice is to set the bouquet at between 20% and 30% of the market value, with no public data to confirm this in Geneva. Measured against the occupied value, which is lower, the same portion weighs more: the quarter of the occupied value used later in this article represents about 19% of the market value.

How much annuity would your property yield?

The annuity yields around CHF 5,400 a month for a 100 m² Geneva apartment valued at CHF 1.09 million, sold as an occupied viager by a 78-year-old woman owner after a bouquet equal to one quarter of the occupied value.

The calculator below returns the bouquet, the monthly annuity and its taxable portion according to the value of the property, the age of the seller and the type of occupancy chosen.

It applies the life table of the Swiss Federal Statistical Office (FSO) and a technical rate of 3.5%. The monthly amounts assume a monthly payment clause in the deed, whereas the statutory regime is half-yearly.

The market value must be set by a valuation of the actual home, according to its condition and location, and the technical rate is freely negotiated between the parties, there being no statutory scale for it. The final amount is the one stated in the sale deed drawn up by the notary.

A few points of difference from the market value actually accepted shift the annuity by the same proportion, and slightly more in an occupied viager: five extra points of value amount to almost seven points for the annuity.

What makes the amount of the annuity vary?

The market value of the property, the age and sex of the seller who receives the annuity, known as the annuitant, and the technical rate applied cause the amount of a property life annuity in Geneva to vary.

• The market value of the property: it is the base and determines each instalment proportionally. The Cantonal Statistics Office (OCSTAT) puts the Geneva median at CHF 10,853 per square metre in 2024 for a non-new apartment on the open market.
• The age of the annuitant: it determines the number of instalments. The FSO's 2023 period life table shows that at 70 a woman has 18.95 years of life remaining, against 10.90 at 80. The same capital of CHF 600,000 thus provides CHF 5,699 a month at 80, against CHF 3,712 at 70, a difference of 54%.
• The sex of the annuitant: the gap in life expectancy reaches 2.71 years at 70. For the same value and age, a man receives CHF 4,181 a month against CHF 3,712 for a woman.
• The technical rate: it discounts future instalments to their present value. No law requires one to be applied in a sale between private individuals. Practice follows the capitalisation rate of 3.5% that the Federal Supreme Court has applied since 1946 to assess damages (ATF 125 III 312), together with the Stauffer and Schaetzle tables, which make it possible to estimate the present value of a life annuity (ATF 86 II 154).

This chart quantifies the effect of age and sex on the monthly annuity, for an identical converted capital of CHF 600,000.

A lower rate reduces the annuity. For a 78-year-old woman seller, a capital of CHF 600,000 generates CHF 5,129 a month at 3.5% and CHF 4,171 at 0.5%.

Market rates are currently well below the 3.5% used in practice: as at 31 July 2026, the Swiss National Bank recorded 0.475% on ten-year Confederation bonds and kept its policy rate at 0.0%.

The type of occupancy affects the starting base.

What is the difference in annuity between an occupied viager and a vacant viager?

The difference in annuity between an occupied viager and a vacant viager is about 23% less for the occupied viager for the same property and the same age, because the value of the right reserved to the seller comes off the price before any calculation.

The occupancy discount capitalises the rent that the home would produce if it were vacant. For the 100 m² Geneva apartment taken as the reference, a five-room one, that rent amounts to CHF 24,300 a year (OCSTAT, CHF 20.25 per square metre per month at free-market rent, 2025). Capitalised at the technical rate of 3.5% over the probable lifespan of a 78-year-old woman, it comes to CHF 248,000, or 22.9% of the market value.

The published rent measures existing leases, including the oldest ones, and therefore probably understates the actual occupancy discount.

Two rights in rem encumber the occupied property, and the choice between them shifts the occupancy discount. The right of residence under article 776 of the Civil Code lets the seller remain in the home, without assigning it or passing it on to the seller's heirs. Article 778 places the ordinary maintenance repairs on the seller as soon as the seller has sole use of the home.

Usufruct confers a full right of enjoyment (art. 745 para. 2), the exercise of which can be transferred to a third party (art. 758 para. 1), which allows the home to be let during the seller's lifetime.

The two structures differ on four points.

	Occupied viager	Vacant viager
Use of the home	reserved to the seller	transferred to the buyer
Price base	market value less 22.9%	full market value
Monthly annuity, reference case	CHF 5,368	CHF 6,958
Letting by the buyer	ruled out while the right subsists	free from signing

The reserved right ends with its holder, which brings the annuity back to the life on which the parties established it.

Which lives can the life annuity be based on?

The lives on which a life annuity can be based are that of the seller who receives it, the annuitant, that of the buyer who pays it, the payer of the annuity, and that of a third party, alone or in combination, article 516 of the Code of Obligations listing them exhaustively; the death of any one of them ends the payments.

• On the life of the annuitant: this is the default arrangement, which article 516 para. 2 presumes.
• On the life of the payer of the annuity: the payments follow the buyer's life and the claim passes to the seller's heirs, unless otherwise agreed (art. 516 para. 3).
• On the life of a third party: the contract refers to a person outside the sale, a younger relative for example.

For a couple, an annuity based on one life only leaves the survivor without income on the first death: only naming both lives in the deed, rather than mere status as the seller, keeps the annuity running until the second death.

An annuity on two lives is calculated on the survival of the last survivor, a longer period than that of either person taken alone. Total life expectancy at 65 in the canton of Geneva reaches 20.6 years for men and 23.1 years for women in 2022 according to the Cantonal Statistics Office, above the Swiss average on which the annuity is calculated.

For a couple of the same age, the period to be covered exceeds both of these values. Spreading the same price over a longer period reduces each instalment. On the reference case in this article, an annuity based on the two lives of a couple aged 78 and 80 falls to CHF 4,749 a month against CHF 5,368 on a single life, which is 11.5% less.

How is the annuity paid?

The life annuity is paid half-yearly and in advance unless otherwise agreed (art. 518 para. 1 CO).

What the law says (art. 518 para. 1 CO): "Unless otherwise agreed, the life annuity is payable half-yearly and in advance."

Only a stipulation by the parties can provide for monthly payment. The sale deed sets the frequency they have chosen and the due date of each instalment; failing such a clause, the half-yearly regime applies by operation of law.

The instalment covered by an advance payment is retained in full. Where the person on whose life the annuity is based dies before the end of the period payable in advance, the payer of the annuity owes the whole instalment (art. 518 para. 2).

By default, the annuity is not indexed. Fixed in nominal francs, it loses purchasing power year after year for the whole term of the contract, and the only remedy is to stipulate an indexation clause in the deed.

The indexation clause names a consumer price index and its reference base. At the start of each month for the month just ended, the Cantonal Statistics Office publishes the Geneva consumer price index, base December 2020 = 100; on the same date the Swiss Federal Statistical Office publishes the Swiss consumer price index.

That is the timetable for as long as the payer of the annuity keeps paying.

This timeline shows the five moments that punctuate the payments, from the bouquet paid on signing to the end of the annuity.

What happens if the buyer stops paying the annuity?

If the buyer stops paying the annuity, the seller can have the property sold to recover payment, take it back or claim a capital sum, depending on the guarantees taken at the time of the sale.

Four protections exist for the seller, known as the annuitant: two come from the law, and two must be written into the sale deed signed at the notary's office. The word mortgage refers here to the same kind of security that a bank holds on a home bought on credit, but for the seller's benefit.

• The seller's statutory mortgage: the law allows the seller to have a mortgage registered on the property sold within three months of the transfer of ownership (art. 837 para. 1 no. 1 and 838 CC). In the event of non-payment, the seller can have the property sold at auction and be paid out of the price. The seller cannot waive this in advance, but once the deadline has passed, registration is no longer possible.
• The buyer's bankruptcy: the payments stop. The seller then lodges a claim with the bankruptcy office for a single sum that replaces the future annuity payments, enough to buy the same life annuity elsewhere, calculated from the seller's life expectancy (art. 518 para. 3 CO). If the seller has had a mortgage registered, the seller is paid out of the sale price of the home ahead of the other creditors. Otherwise, the seller shares what remains of the buyer's assets with them and often recovers only a small part of the sum.
• The contractual mortgage: the sale deed can also provide for a mortgage securing the future annuity payments. As the duration of the annuity is unknown, the deed sets a maximum guaranteed amount (art. 794 para. 2 and 824 para. 1 CC). In Geneva, registering it costs 0.085% of the guaranteed amount, up to a maximum of CHF 20,000 (rsGE E 1 50.06, art. 4).
• Taking the property back: the seller can take the property back for non-payment only if the sale deed expressly provides for it (art. 214 para. 3 CO, applicable to immovable property by art. 221 CO). For this right to remain valid against a future purchaser of the property, a right of repurchase is noted in the land register, for a maximum of 25 years (art. 216a CO, art. 959 para. 2 CC).

When does the annuity end?

The annuity ends on the death of the person on whose life the contract bases it, that is, the seller in an ordinary property viager.

No calendar term limits the commitment: neither a duration nor a number of payments is fixed in the contract. The death of the payer of the annuity, the buyer, does not extinguish an annuity based on the seller's life.

The heirs acquire the estate as a whole by operation of law and are personally liable for the debts of the deceased under article 560 of the Civil Code: they take over the property and the obligation to pay the annuity until it ends. An heir who refuses this burden can disclaim the inheritance (art. 566 CC), which removes the heir from the whole estate and not just from the annuity.

The element of chance falls equally on both parties. Neither the annuitant nor the payer of the annuity knows at signing the total that will actually be paid: the length of time the annuity runs will alone decide what the price of the property ultimately turns out to be. This uncertainty is the substance of the contract, not a drafting flaw.

What portion of the annuity is taxable?

Only the yield portion of the annuity is subject to income tax, and since 1 January 2025 this portion has been recalculated every year.

Art. 22 para. 3 let. c of the Federal Act on Direct Federal Tax (LIFD) expressly mentions life annuity or lifelong maintenance contracts, a category that includes the property viager because its contract falls outside the Insurance Contracts Act. The calculation takes place in two steps.

• Reference rate: the annualised yield on ten-year Confederation bonds, increased by 0.5 percentage points.
• Yield portion: the formula in the article converts this rate into the fraction of the annuity that constitutes income, then rounds it to a whole percentage. A low reference rate does not produce a proportionally low portion.

The Swiss Federal Tax Administration (FTA) publishes the value once the tax period has closed.

• Tax period 2025: annualised yield of 0.11%, giving a reference rate of 0.61%, from which the formula derives a taxable yield portion of 7%, published on 30 January 2026.
• Tax periods up to 2024: flat rate of 40%, repealed for these contracts.

A value not yet published is replaced by the previous year's calculation, with the assessment corrected afterwards. Geneva incorporates the rule in its law on the taxation of individuals, and the cantonal tax applies the same yield portion.

The bouquet received in cash is exempt from income tax as a private capital gain, the sale itself falling under the Geneva real estate capital gains tax and registration duties.

Does the annuity reduce your supplementary benefits?

Yes, the annuity reduces your supplementary benefits, as it counts among the income taken into account, unless it causes the entitlement itself to be lost.

Article 11 of the Federal Act on Supplementary Benefits counts annuities and periodic benefits among this income and adds one tenth of net assets for old-age pensioners. Before the sale, a home occupied by its owner is left out of the net assets that determine entitlement, which are capped at CHF 100,000 for a single person; after the sale, the bouquet received counts in full.

The cantonal wealth tax undergoes the same shift in its base: the property drops out and the capital received comes in at its nominal value. Whether the tax rises or falls depends on the gap between the Geneva tax value of the property and the price received.

The Supplementary Benefits Service of the canton of Geneva carries out the individual calculation and is notified of changes in assets.

What seller profile does the life annuity suit?

The seller profile that the life annuity suits is that of the owner whose wealth consists essentially of the home and whose retirement income no longer covers their expenses.

Three profiles benefit.

• Wealth made up mainly of the home: an occupied viager converts tied-up capital into a monthly income, without moving out.
• No need to pass the home on: the seller does not wish to leave the home to any heir.
• Recurring costs: maintenance, works and home help are financed from a regular income stream.

Two profiles lose out.

• A wish to pass the home on: ownership passes to the purchaser upon registration in the land register.
• A need for the full capital: the bouquet covers only a fraction of the price, the balance depending on longevity.

Purchasers are divided between individuals and institutional vehicles, including a Swiss real estate fund dedicated to viager, approved by the Swiss Financial Market Supervisory Authority (FINMA), operated from Geneva and reserved for qualified investors.

Other arrangements make it possible to raise cash from the home, with or without transferring ownership, and a viager sale follows its own course.

What other options are there for drawing an income from your home?

The other options for drawing an income from a Geneva home are a conventional sale, a sale of bare ownership, an increase in the mortgage and letting the property.

• In a conventional sale, the price is paid in full in cash to the owner, who leaves the premises on the date set for handover of possession. Over its whole duration, the transaction amounts to selling a property at the market price.
• In a sale of bare ownership, the purchaser pays a reduced price in cash but no annuity. The seller reserves the usufruct of the property (art. 745 CC), which ends on the seller's death (art. 749 para. 1 CC) and leaves the seller responsible for current maintenance (art. 764 para. 1 CC).
• When the mortgage is increased, the bank pays out cash in return for periodic interest, provided the required affordability is met.
• Finally, if the property is let, the rent is added to taxable income as income from real estate assets (art. 21 para. 1 let. a LIFD), no more and no less.

None of them makes it possible to keep both the home and a lifelong income.

How does a viager sale work?

A viager sale takes place in five steps, from the valuation of the property to the registration of the transfer in the land register.

1. I have the market value of the home appraised by an independent expert.
2. With the buyer, we set the price by splitting it between the bouquet and the annuity.
3. We negotiate the occupancy conditions and payment guarantees.
4. We sign before a notary, with the annuity clause included in the deed.
5. Within three months of the transfer being registered in the Geneva land register, I request the registration of a statutory mortgage.

The moment at which the notary steps in is decisive: a notarial deed is required for the transfer of a property viager, a form imposed by art. 216 para. 1 CO for any sale of immovable property, which absorbs the written form required for a life annuity contract by art. 517 CO.

Can you sell as a viager without your heirs' consent?

Yes, an owner can sell as a viager without the consent of their heirs.

An owner is free to dispose of their property during their lifetime (art. 641 para. 1 CC), the compulsory portion of descendants, the spouse and the registered partner taking effect only on death (art. 470 para. 1 CC).

The heirs entitled to a compulsory portion then have the action for abatement (art. 522 CC), which reaches disposals made with the manifest intention of circumventing the rules on the compulsory portion (art. 527 no. 4 CC), but spares a sale concluded on balanced terms. This action becomes time-barred one year after the heirs learn of the infringement and ten years after the succession opens (art. 533 para. 1 CC).

Is there a minimum age for selling as a viager?

No, there is no minimum age for selling as a viager in Swiss law: only the general conditions of legal capacity apply, being of full age and having capacity of judgement (art. 13 and 14 CC).

The threshold of 70 that purchasers apply is a matter of market practice, as is the age gap of some twenty years sought between the annuitant and the payer of the annuity. This practice follows the mechanics of the amount: the shorter the seller's remaining life expectancy, the higher the monthly annuity paid on a property of the same value.