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Bulgarian Property Investments
- A Suitable Pension Investment?
by K Damian Qualter BA MBA
Bulgarian Property Investments - A Pension Option?
The pension investors can expect a renewed rush into buy-to-let property next
year when the new pension rules come into effect. As of April 2006 they will
allow pension investors to gain a 40% tax relief when they invest in property
through self-invested personal pensions. What this means is that properties that
are worth 200,000 can actually be bought for 120,000 by higher-rate taxpayers
who are using funds in their pensions.
Many of the investors are known to be re-mortgaging their main homes so that
they can release the cash value and use it to purchase even more property.
However, there are some others out there who will question why buy-to-let
investors should get this new tax relief at all, when first-time buyers cant
even afford to get on the first rung of the property ladder.
Right now property companies are affiliating themselves up with financial
advisers to sell off-plan apartments to investors when the new rules are in
place. However not everyone is on board with this new plan. The tax breaks that
are gained from investing through a Sipp are supposed to provide a huge boost
for residential property investors, but buying new-build might not really be a
good way of securing your future retirement money. There are an estimated
120,000 Sipp plans, most of them are held by Britains richer investors.
Most of the pension experts right now believe they are only good for higher
rate taxpayers who enjoy a 40% tax break on their pension contributions. Every
slogans such as "retire rich with a property pension" has been appearing on
financial websites, on company literature and, more and more often, in radio
advertisements all over the place and even online. Claims are focused around
rule changes which mean that the savers can use their pension to:
• Buy property at a 40% discount. • Never gains pay capital gains tax or
income tax on their property profits. • Cut the income tax on their entire
salary or business profits to nothing.
This naturally applies if they use the rules to the extreme. Many of those
campaigners who against poverty have watched as the government first proposed
pension rule changes that allow the rich new ways to avoid paying tax by
investing in a wide range of assets. These Off-plan developments can eventually
lose their premium within months of completion, almost like a new car as it
leaves the forecourt. So there is a very large risk involved here.
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Qualter Managing Director of BuyProperty4Less - FREE Guide Click Here Now!
Bulgarian Property