September 28, 2005
Spain Tops List for Sunny SIPPS Investors
There are as many as 1,000 investors, particularly the property in Spain, who would benefit from the new tax friendly rules that will establish the government as having to contribute up to 40,000 to 100,000 needed to buy a second home in this country. A recent study conducted proved that many people and many investors are out to take advantage of this new tax break, which would benefit them from buying a second home under the sun. This tax break also has its objective as having people to invest in their personal pensions.
An amount of 1.5 billion will be around to be shared into the overseas properties, particularly in the countries of Spain and France, as people use tax breaks to purchase holiday homes, according to the study by Hangreaves Lansdown, one of UK’s biggest independent financial advisers.
According to the head of the pensions research for the firm Tom McPhail, people want to avail of the tax break immediately, and that they want it right now. “This is actually a mixture of the property investment and government tax break that has people shuffling to buy their own properties.”
The rules that will take effect on April 6 of next year said that investors will now be able to buy residential properties using their funds in their self-invested personal pensions (SIPP). With the usage of this, the benefits are endless: they are able to put up 215,000 a year into the SIPP, they can take out mortgages in Spain to fund the properties, and they can receive tax breaks afforded to other pension savings. The average cost of the expanded SIPP property is hailed to be 195,000, which means that property buyers are more likely to spend 10 billion on these properties, of which 8.5 billion would be spent on Britain and this is almost equal to about 5 percent of the value of the UK property market.
It is estimated that 80 percent of property buyers are expected to use their SIPP to put up a buy to let property.
Posted on: Spain
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