Buying with accretion clause (tontine)
The accretion clause (also called tontine pact) inserted in the act of buying a property can be interesting if you buy two. It avoids the dangers of undivided and warrants to surviving the property of the whole property.
How to create an accretion clause (tontine)?
Beware the tontine may not be suitable for your situation and can sometimes turn into a real trap.
As a "random" contract, the tontine purchase must respect the conditions of the hazard. Buyers must all finance part of the property, and have a similar life expectancy. Failing this, the tontine purchase may be requalified as a donation .
How does an accretion clause (tontine) work?
Buying with accretion clause while the buyers are alive:
Unanimity is required in order to act. If the buyers no longer agree (or wish to separate), they may decide to sell the property or to agree that one of them buys out the other. Unanimity is required in this case because, unlike what happens in joint ownership , purchasers can cause the shares to justice or even require the sale of housing. Indeed, the adage "no one shall remain in undivided" is not applicable.
Buying with accretion clause when one of buyers dies:
The predeceased person is deemed never to have purchased, only the surviving buyer is considered the owner since the beginning. The heirs of the deceased therefore have no interest in the property (the property is not part of the deceased's estate).
The surviving purchaser must nevertheless pay inheritance tax calculated on the degree of relationship he has with the deceased and value from it collects (free between spouses and PACS partners, 60% between cohabitants after a allowance of €1,594). At this principle, however, an exception. So when the property is the primary residence buyers at death and its value is less than €76,000, the survivor pays only for pecuniary transaction tax (the legal maximum rate of 5.81%).
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