A key feature of self-administered pension arrangements is your ability to identify and acquire specific property investments.
Advantages of buying property through your pension fund
All income and gains within pension schemes 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 property as part of their pension investment strategy but here is a list of the top 7:
- You can choose the property you wish to purchase.
- Both residential and commercial property can be acquired.
- You can use your own market knowledge and contacts to access unique 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.
- If available, borrowing can be utilised to assist in funding the purchase and the property fund can even be registered for VAT if required.
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Property Management Panel
In order to purchase a property through an ITC pension scheme, it is a requirement of the Revenue Commissioners that any property held in a pension trust is properly managed. For this, ITC has created a Property Management Panel, where you can choose your property agent. It is a condition of ITC that the property agent must be selected from this panel. Choose Your Property Manager
With a view to making property purchases easier, PensionProperty.ie has developed a series of arrangements and procedures to ensure the process is as smooth and as straightforward as possible. A key feature is the overall comprehensive level of service throughout all stages of the purchase.
PensionProperty.ie can facilitate purchases in Ireland and the UK.
The above is based on current Revenue law and practice which is subject to change.