English
FrançaisThere is finally a safe way to stop the pension rot
Old age should be a time of plenty, not one of worry! The government are cutting out state benefits indiscriminately in light of the global financial situation, leaving many older people without a medical card.
As we are all aware, most pensions in Ireland are underperforming at the moment with some pension values dropping by more than 50%.
So if the government are reluctant to look after you and your private pension is losing value every day, how are you supposed to finance your old age? Controlling your own pension is a start, and investing in something long-term, secure and stable. Many people don’t realise that they can take control over their pension funds and decide themselves what to invest it in.
Did you realise that it is possible to purchase French leaseback property through your pension?
Most property investments that people make are with their savings, which is after-tax money. So you have to earn it, pay tax on it and then decide to invest it in your chosen property. The tax experts calculate that for every €100 you invest this way, you must earn €185.
Pension investments are made with before-tax money, meaning that you invest before-tax earnings in your pension.
Here is how it works:
Your deposit of 20%, all purchase expenses & all property related expenses, including mortgage repayments, are paid from the pension fund.
You borrow up to 80% (taking a French mortgage), also through the fund.
The French government will then refund your 19.6% vat, which can be paid into the mortgage if you wish (making the repayments lower).
All of the rental income is tax-free. Leaseback has a rental guarantee of up to 23 years, which increases each year based on the French index.
Another big advantage is that if you decide to sell the property after 15 years, there is no capital gains tax due on the profit in Ireland or France!
pride themselves on providing a first class service, looking after everything for you from helping you choose the right property to the contracts and mortgage. They also help you with any documents you receive after the purchase. This is proving to be a very popular way for Irish investors to shelter their property investment from tax and grow their pension fund. It also gets your pension money working for you in a big way, as you are using the banks money as well as your own.
mccos39755.6984606481
Hi Noel,
I appreciate that you might not have had a good experience with the leaseback scheme, as many people have.
The statement on your post is correct. If you dispute that, could you tell me which part you disagree with?
If you choose a stable, sucessful managment company then you will receive guaranteed rent for up to 23 years. There are many owners out there who are testament to this.
I agree, that depending on the way you structure your mortgage, you might end up having a shortfall between rent mortgage, however this is something that is explained clearly to clients before agreeing to purchase. Leaseback is an investment and as such requires investment. However in the long-term it is a good investment with good returns. Mortgage rates have gone up considerably in the past year and are only now beginning to come back down a bit, this is bound to make a difference.
As for your suggestion that I am doing something underhanded by posting here, from what I can see it is unsubstantiated. All I am doing is informing people of a good investment product for their failing pensions......... and my job
Ian,
I wonder have you been reading the posts at all on this forum - almost everyone tells about difficulties in leaseback schemes, usually nonpayment of " guaranteed " rent. From new management companies to the largest most established ones there are problems. Every week at least one new complex is added to the list of defaulters in rent payments.It is very frustrating for owners who trusted this system of investment & who find themselves struggling now making payments, dealing with non responsive management companies, expensive French lawyers who are milking the system - to have you advertising what a great investment it is!!!!
Annette
Ian,
You are flogging a dead horse trying to sell this scheme on these forums.The people who read these forums are well aware of the risks of the unregulated leaseback schemes.
As annette said,every week there is a new post regarding non-payment of rent.Also articles are appearing in the national press about the risks associated with leasebacks.
The biggest con is the fact that most leaseback insee increases are capped,usually around 2%.If they wern't the 20% plus increase after 3 years would go a long way to making it cash flow positive.
You would have to put a 40% deposit down when you bought to make it cash flow positive from the start.And that 40% deposit could be earning an awful lot of money compounded over 20 years.
Ian,forget,find something else to do!
John
Ian
It seems that most people have already conveyed my thoughts to you in one way or another.
If you had done your research correctly you would have realised that this is not the best place to try and sell your product.
I would also be very interested to hear if your company or client underwrites the rent for the prospective clients. As you say it is guarenteed for the lease duartion with no risk so I cannot see why not.
What you are offering is no more than a SIPP that can be an investment vehicle for a commercial property (UK equivalent). However the way you are doing it is more finding a way round the system rather than working to the system. A loop hole that is currently being looked at and I think will be closed in time.
I am not a person to knock anybody for an idea so good luck with it but you may wish to be more selective of your audience.
Mutley
Hi All,
All I know is that every one of our clients are extremely happy with their leaseback purchases and thankfully are receiving their rental incomes. Many of these clients are now purchasing again through us, some for the third or fourth time!
I am aware that a number of management companies have gotten into difficulties and are no longer paying rental incomes. This gives a bad name to what is otherwise a very well structured and thought-out scheme (the reason that all of you bought in the first place). There are bad and good elements in everything.
Many thanks for all your comments and feedback though, it is much appreciated. I hope those of you with problems get them resolved quickly.
Kind regards,
Ian
Ian
You said "every one of our clients are extremely happy with their leaseback purchases and thankfully are receiving their rental incomes". Could you provide the names of the management companies involved? There will be a lot of people getting their leases broken and looking for more reliable management companies.
Another Ian :-)
I have made some enquiries with this in the UK and it treads a very thin line and I was advised to avoid.
I think with the way leasebacks are going at the moment with non payment of rents etc you would have to be out of your mind to put your pension into one of these.
Cash is King at the moment and will be for some time to come as long as it is in the right banks!
Paul
Hi Liam, i am aware that my post has been edited, I am unaware of how to contact you other than through this site.
The process works by transferring your pension, or some of it to a trustee company who you then direct to invest in the property by way of a deposit and then borrow the remaining 80%.
You will not be taxed on capital gain through a pension and all the rental income is also tax free. This is a benefit of investing through a private pension.
It does all depend on what type of pension you have currently, however if you are self-employed or a company director, you should be able to do it. It is possible to do with certain UK pensions also.
Mutley, we have already sold properties through this system and have a huge amount of interest from people looking to do it. It is a solid system that has taken 18 months to develop in conjunction with legal people here and the French tax authorities.
We only use the biggest business rental leaseback company in France, who have a solid model and were recently invested in by a huge French insurance company.
I respect your view that cash is king at the moment, however you cant borrow on it and have a long term return like you would have through this system. You will also be subject to DIRT. If you put €100k in the bank, you will make at most 6% on it. If you leave it in your pension you will probably lose money on it (most people have). If you invest it in a leaseback with a good management company, you will have an asset worth 4 times your investment producing a good rental income every quarter in 20 years time.
Ian