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Investing in Property through Pension

Investing in Property through your Pension is a unique opportunity that allows rental income to grow your pension fund while benefiting from generous tax reliefs. All rental income received from your chosen property is free of income tax and is channeled back into your pension fund. 

Pension rules allow the use of retirement funds for the purchase of real property assets through Self-Administered Pensions in Ireland.

Properties held under the categories of residential, industrial and commercial properties (or a combination of each) can be purchased on a standalone basis, co-ownership or held within syndicated funds.

 

Who is Eligible?

How can you fund it?

  • Transfer existing pensions in to a self administered pension.
  • Personal Contributions are restricted to a percentage of NRE cap €115,000.
  • Company Contributions – your company/employer can contribute to a pension on your behalf.
  • Borrowing (Gearing) Funds – Property can be financed with specialized mortgages capped at 50% Loan to Value.

 

Are there restrictions?

  • Your property is for investment only – you wont be able to use it personally.
  • The property cannot be sold or let to relatives, your employer or directors of associated companies.
  • The vendor must not be a relative, your employer or directors of associated companies.
  • Gearing would significantly increase the risk profile of the investment.
  • It is an illiquid asset.
10 Advantages of purchasing a property through a pension

When you retire

Rental income can be a good source of income well into retirement.

On retirement, you can take 25% of the value of the pension fund as a lump sum, of which up to €200,000 is tax free. While drawdowns from your pension are subject to income tax, it may be that in retirement the income tax will be at a lower rate than the rate you paid while working.

You can then transfer the property in specie to an Approved Retirement Fund (ARF) and held as a pension asset. Here, you can continue to receive rent tax free into your pension while drawing your own income from the pension fund.

 

How do I get started?

Fill out your details and enquiry below, and one of our Qualified Financial Advisors will call you back to assist you.

 

Got any questions?

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