Buying Property through your Pension
Advantages of buying property through your pension fund
A key feature of self-administered pension arrangements is your ability to buy Property
What are the Advantages of buying property through your pension fund?
All income and gains within the pension are exempt from income tax and capital gains tax (CGT) so the rental income is not subject to income tax nor will CGT be payable on the sale of the property.
There are many reasons people are choosing to buy property as part of their pension arrangement but here is a list of the top few:
- You can choose the property you wish to purchase.
- Both residential and commercial property can be bought
- You can use your own knowledge and contacts to access property investment opportunities.
- Income tax relief on employee and employer contributions remains at the higher rate of tax.
- On retirement, you can take 25% of the value of the pension fund as a lump sum, of which €200,000 is tax free.
- You have control over every aspect of your pension affairs including all investment and contribution decisions.
- Currently there are some banks lending to pension arrangements to help fund the purchase of property and the property fund can even be registered for VAT if required.
It is a requirement of the Revenue Commissioners that properties held in a pension arrangement are properly managed and it is a condition of purchasing a property through your pension scheme, that a property agent be appointed. Another condition is that the property must be at arm’s length from you.
The above is based on current Revenue law and practice which is subject to change.
Why not take advantage of our Pension Review, this review will give you a professional assessment on how well your existing arrangements meet your needs. It will also help in the decision on whether you should trade the fund yourself and or buy property
Call our Financial Planning Team
The above if for information purposes only and does not constitute financial advice in any, we recommend that you speck with us before making any financial decisions. We recommend a holistic approach to financial planning and we can help you put your plans in place.