The new property model involves the sale of houses to investors, at a discount, which allows them to be lived in until the end of the life of the elderly owner.
This real estate business, which is already very common in France and England, was imported to Portugal just four years ago, by Viager, which ended up following the French model. Not long ago, another concept emerged in this market with the launch of Empathia, which in addition to guaranteeing the purchase of homes for elderly people with usufruct rights, also invests in health and well-being services for this population, according to Expresso.
But how does this business model work?
Investors buy homes from the elderly, with discounts that can be between 30 and 60% and with the guarantee that the elderly person can live in the house until the end of their lives (the so-called right of usufruct), says the same newspaper. After the death of the elderly person, the property passes into the hands of the investor and descendants lose the right to the house.
For example, a house valued at €200,000 is subject to a discount depending on the owner's age and average life expectancy, and the house can be purchased by an investor (such as pension funds) for around €150,000.
What a disgusting practice. It's like preying on the least able in society. Anyone who thinks otherwise should hand their head in shame. This should be outlawed worldwide.
By Andrew Cossins from Beiras on 23 Nov 2024, 07:23
@Andrew Cossins, less of the outrage please. This type of scheme could be of interest to many types of people, for example, someone with no descendants with limited funds and who needs access to cash. They can sell now and enjoy the proceeds of the sale for the rest of their life, while retaining the right to live in their home. If it weren't allowed, they'd be deprived of these funds. The only option would be to sell, move out, and rent somewhere, not easy when you're elderly and possibly infirm or ill.
So be careful before you dictate to others what people should or shouldn't be allowed to do with their assets. It's ultimately their business and their choice.
By Billy Bissett from Porto on 25 Nov 2024, 12:25
My aunt did this and hardly had enough money to buy a new ( modest ) car. Two years later she was dead. It's spreading because it is a great investment for the company but dreadful for the old person. A real con, but legal unfortunately.
By Howard from Algarve on 25 Nov 2024, 13:10
This practice has been common in the United States for decades, primarily run by insurance companies and often referred to as reverse mortgages.
The elderly seller is rarely the beneficiary of this kind of transaction.
By Phil Weingrow from Lisbon on 25 Nov 2024, 14:58
In the French viager system, the elderly one's property is bought for a certain sum, normally reasonable, and complemented by a monthly sum, paid until the elderly dies. So, the buyer gambles on how long that will be... Jeanne Calmet sold her apartment to her notary when she was 94. The notary died before she did (she lived to be 122 1/2), and had paid out to her more than twice the apartment's value. But he was a good sport about it, at least when in the limelight.
By Janne from Other on 30 Nov 2024, 10:55