Thinking of buying a property through your pension fund?

June 15, 2021 Vivienne Molloy

Thinking of Buying a property through your pension fund? New restrictions are in place but there is a solution…

One of the most flexible ways to save for retirement is through a self-administered pension. These plans also give you control over the investment strategy, and income you take in retirement – subject to government minimums. When you pass away, your estate inherits any assets in the SSAP.

You do not have to be a company director to have an SSAP, any employee can set up a SSAP with the permission of their employer.

Buying a property through your pension or Self-Administered Pension [SSAP] structure , new EU Directive imposes restrictions, but there are solutions.

A new EU Directive put in place on the 21^st of April 2021 imposes restrictions on anyone looking to buy a property through their Self-Administered Pension.

From the 22^nd of April 2021, you cannot hold more than 50% of your overall pension assets in a property or unregulated investments. This effectively means it becomes very difficult to buy a property through a Self-Administered Pension. Anyone currently holding property assets through a Self-Administered prior to the 21^st of April 2021 is not affected or if they had agreed to purchase a priority and the purchase was at an advanced stage the purchase can proceed.

This new EU Directive does not apply to the following pension types

PRSA’s
Approved Retirement Funds [ARF’s]
Personal Retirement Bonds

So what is the solution?

At Cregan Kelly and O’Brien Financial Planning we have put together a number of options for you and the steps involved if you currently have an existing SSAP

Wind up you’re existing SSAP pension, you may be required to invest a once off meaningful contribution into your SSAP if the SSAP is new, you can check with your current pension advisor on this or we would be happy to assist you.
Set up a Pension Retirement Bond and then arrange the transfer of your SSAP pension assets into the Pension Bond.
Once your pension assets are invested in the Pension Bond you can purchase a property with these pension assets.

What about lending to help purchase a property.

There are some lenders that will lend to a Pension Bond but some impose minimum level of borrowing.

For more information on Buying Property through a pension please call Colm Kelly of Cregan Kelly O’Brien Financial

01 8700370 | Colm@ckob.ie | www.ckob.ie