Investment property through pension

[Slim]

Article in Indo today about tax advantages of buying an investment property via pension fund. I have a PRSA that I might convert to ARF this year.

However, would it be possible to use it, instead, to purchase a property for rental? The amount in the PRSA would be a little shy of the total cost.

 

[Brendan Burgess]

Your personal finance questions – Can I avoid paying tax on rental income if I buy a property with my pension?

Q Is it true that I don’t have to pay income tax on rental income earned from an investment property if I buy that property through a pension scheme?

www.independent.ie

All this article says is that rental income and capital gains are not taxed within the pension fund.

But it's the same for any other investments held within a pension scheme. If your PRSA is in equities, then the dividends and capital gains are not taxed within the PRSA.

There is no advantage peculiar to property.

Your pension fund should be part of your overall assets. If it makes sense to have an investment property in your overall portfolio, then you would be better off holding that outside the pension fund and owning equities within the pension fund.

1. You can do what you like with the property if it's owned by you directly e.g. live in it yourself or let your children live in it.
2. Deal directly with the RTB and the courts if you have problems, rather than go through trustees and solicitors if it's owned through your pension scheme.

Brendan