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 21st of April 2021 imposes restrictions on anyone looking to buy a property through their Self-Administered Pension.
From the 22nd 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 21st 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
- 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