With a life annuity, you sell your property in Munich and receive the equivalent not as a lump sum, but as a lifelong monthly payment — optionally combined with a partial payout. You continue to live rent-free, the right of residence (Wohnrecht) is registered in the first priority position in the land register (Grundbuch), and termination due to owner-occupation (Eigenbedarfskündigung) is excluded.
Condominium in Munich, market value 850,000 €, beneficiary 75 years old, annual rental value 4 % (34,000 €). According to §14 BewG, the capital value of the right of residence (Wohnrecht) is approximately 383,000 €, leaving about 466,000 €. If 50 % of this is paid out immediately, the remaining approximately 233,000 € with a statistical remaining life expectancy of 12.7 years results in a monthly life annuity of about 1,530 € — in addition to rent-free living worth approximately 2,830 € per month.
Non-binding estimate according to §14 BewG and mortality tables 2020/22 (DESTATIS). The binding offer depends on location, condition, rental value appraisal, and investor.
How does a property annuity work in Munich?
You sell your Munich property and receive the purchase price not as a lump sum, but wholly or partly as a lifelong monthly annuity. The right of residence and the annuity obligation are registered in the land register with first priority; a notarised right of withdrawal secures you against payment default.
How high is the property annuity for an apartment in Munich?
The annuity amount results from the market value minus the capitalised value of the right of residence, distributed over the statistical remaining life expectancy. For a Munich condominium with a market value of 850,000 €, a 75-year-old beneficiary, and an annual rental value of 4%, approximately 466,000 € remain. If 50% of this is desired as a lump sum payment, the remainder, with a remaining life expectancy of approximately 12.7 years, yields about 1,530 € monthly annuity. The verified offer is always binding.
Why is the property annuity particularly attractive in Munich?
Munich is one of Germany's most expensive real estate markets: condominiums are around 10,450 €/m², houses around 9,850 €/m², and the comparative rent around 21.80 €/m² (as of 2024, Source: Immobilienmakler München Starnberg). The high market value results in a correspondingly high annuity amount — at the same time, the high comparative rent increases the capitalised value of the right of residence, which is deducted.
Is the property annuity taxed?
For a lifelong property annuity, only the income portion is subject to income tax; it depends on the age at the start of the annuity. The sale of an owner-occupied property is generally tax-free after the periods specified in §23 EStG [Income Tax Act]. Tax advice before completion is advisable in any case.
What happens if the buyer stops paying?
The annuity obligation is registered as a real burden (Reallast) in the land register. If payment ceases, the notarially agreed right of withdrawal takes effect: the property reverts to you. Annuities already paid do not have to be reimbursed.
Property Annuity or Usufruct — which is more sensible in Munich?
The property annuity provides a predictable monthly income, while usufruct offers a higher lump sum payment and the right to rent out the property. Those who need ongoing liquidity choose the property annuity; those who need capital for gifts, care provisions, or investments usually choose usufruct.
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