28-Aug-18

New Mortgage facility to Buy property through your pension

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Cregan Kelly O’Brien Financial Planning are delighted to announce that we can now offer a new mortgage lending facility from ICS Mortgages that will provide you  with  a mortgage to purchase a property with your pension.

Why does it make sense to buy a property with your pension?

Buying an investment property with your pension is very tax efficient for the following reasons:-

  • All rental income is invested into your pension tax free;
  • All costs associated with the purchase, renovation, rental and sale of your property are tax free;
  • If you were to sell the property there is no capital gains tax to pay on the proceeds;
  • If you don’t have sufficient funds in your pension to buy your property, your pension can borrow to complete the purchase.

    Rental returns from properties have never been higher and this is what makes buying a property with your pension a very attractive investment.

    There are 2 ways to buy a property with your pension:-

    1/ Use your pension assets to purchase the property without taking a mortgage lending facility.

    So, for example if you have built up pension assets to the value of say €300,000 you could purchase a property up to the value of close to €300,000 [you generally need to have liquidity of 10%] and the property goes into your pension fund. All rental income is invested tax free into your pension

    2/ Take out a mortgage facility to complete the purchase, so if you had pension assets to the value of €300,000 and you wanted purchase a property to the value of say €500,000 then we could arrange a mortgage facility to complete the sale. It would mean that by purchasing a property with a higher value you would receive a higher rental income and hopefully the property would appreciate more in value. The mortgage would have to be repaid and this can be way of

    A/ Capital and Interest mortgage over 15 years, where the mortgage is repaid over the term of the mortgage

    B/ Interest only option for up to 15 years where the capital could be paid back by either selling the property at a later date and repaying the mortgage from the sale or use the rental income that has built up to repay the loan or repay the loan from future pension  contributions that you make to  your pension.

    To buy an investment property with your pension you will need initially to set up a Small Self-Administered Pension [SSAP] and once this is set up you can transfer your existing pension into the SSAP and proceed with the purchase.

    The process is as follows

    1/ We set up your SSAP pension 

    2/ You identify the property that you wish to purchase

    3/ Do you need to borrow or do have your sufficient pension assets to complete the purchase 

    4/ If borrowing is required then we arrange thi

    5/ Solicitors then complete the purchase of your property through your pension

    We at Cregan Kelly O’Brien Financial Planning are experts in advising clients in relation to Self Administered Pensions.

    For more information or advice on the above please call Colm Kelly of Cregan Kelly O’Brien Financial Planning at 01 8700370

    Cregan Kelly O’Brien Financial Planning is regulated by the Central Bank of Ireland  

    Last modified on 28-Aug-18
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    About Cregan Kelly O'Brien

     

    In 2007 Maurice Cregan and Colm Kelly established CK Financial Services to provide independent financial planning and advice to business owners and individuals. Tommy O'Brien, a General Insurance expert, then joined them in 2010, enabling them to meet the full financial needs of their clients. Financial Life & Planning Limited would deliver Financial Services, and O'Brien Cregan Kelly Insurances would deliver Insurance Broking services. Two Business Names were registered Cregan Kelly O'Brien Financial Planning and Cregan Kelly O'Brien Insurances

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