Installment sale vs viager: which patrimonial solution to choose?
The French viager and the installment sale (vente à terme) are two cousin mechanisms that often answer similar objectives — but follow very different legal and tax logics. Here is how to decide.
The common ground: upfront capital + scheduled payments
Both rely on the same payment structure: a capital paid at signing (the bouquet) followed by monthly payments to the seller. Both let the seller mobilise property value without moving (occupied formula) or as part of a departure (free formula). Both rest on a notarial deed with time-tested protections: vendor's privilege, resolutive clause, indexation.
The fundamental difference: uncertain duration or fixed term?
In the viager, the annuity runs for life. Duration is by nature uncertain — it depends on the seller's longevity. In the installment sale, the number of instalments is fixed in the notarial deed — typically 120, 180 or 240 months. No uncertainty: buyer and seller know exactly how much and for how long payments will run.
Comparison table
| Criterion | Installment sale | Viager |
|---|---|---|
| Duration | Fixed (10–20 years) | For life (uncertain) |
| Seller's death before term | Instalments paid to heirs | Annuity ends |
| Nature of payments | Deferred payment of price | Life annuity |
| Tax allowance (CGI 158-6) | Not applicable | 70% if seller > 69 |
| Buyer visibility | Full | Uncertain |
| Early transmission to heirs | Secured | None |
When to choose the viager?
- Seller without direct heirs who wants maximum lifetime income.
- Older seller in good health seeking the highest monthly amount — life annuities are on average larger than fixed instalments.
- Wish to benefit from the 70% tax allowance on the annuity (article 158-6 CGI) — a major viager advantage not transferable.
When to choose the installment sale?
- Seller with heirs who wants to guarantee they receive the full value, even in case of early death.
- Buyer refusing viager uncertainty who wants known cost and duration.
- Buyer without access to bank credit — the installment sale is one of the rare legal solutions for direct deferred payment to the seller, without interest.
- Younger seller (e.g. 55–65) for whom the viager becomes mathematically unfavourable.
References: French Civil Code articles 1583 and following; French Tax Code articles 158-6 and 150 U. Information for guidance, please validate with your French notary.