What is exciting about Property Pensions is that people will be able to borrow money and invest in residential property via their Self-Invested Personal Pension for the first time. Given the property market boom in recent years, this could be very profitable.
The way that Property Pensions work is as follows:
When you purchase a property within your pension you get a rebate of 22-40% on your investment from the government.
In other words you are able to get a discount of up to 40% off the property purchase price. On top of this you are able to avoid paying income or capital gains tax on your new property.
Under the new rules you are allowed to put your own home within your Self-Invested Personal Pension. However, this is less lucrative that doing so with a buy-to-let property.
The reason for this is that first homes are already exempt from capital gains tax and you are unlikely to earn an income from your home which could be taxed.
A note of caution however:
Although Property Pensions could be a very way to save and invest money, do remember that as with any other investment. Diversification is essential to enable you to manage your risk. Therefore do consider investing in property, but ideally invest in something else as well.
http://www.propertyforme.co.uk is a private sales site covering the whole of the UK designed to help you save money in estate agents commission fees.
Source: www.articlecity.com
