I suppose we have always looked on the investment property as our "pension".
I want to piggback on this question as someone who also has an invement property (read: unwanted previous apartment), and also consider this as a long-term 'pension', however I am also maxing out AVC's, so when factoring in relevant taxes, I am still looking at the apartment as either a future income stream (albeit taxed) or an asset for future disposal for purpose of lump-sum (subject to CGT).Sometime, I will get around to writing my book on great financial myths and mistakes. This must come in at number 1 on the list.
You have €304k net invested in your property. It's subject to income tax and CGT.
It would be far better to have this in a pension fund.
- You would get tax relief putting it into the fund
- It would grow tax-free
- You will probably get 25% of it tax free when you retire
- And as you draw it down, it may well be taxed at a lower rate than you are paying now.
I want to piggback on this question as someone who also has an invement property (read: unwanted previous apartment), and also consider this as a long-term 'pension', however I am also maxing out AVC's, so when factoring in relevant taxes, I am still looking at the apartment as either a future income stream (albeit taxed) or an asset for future disposal for purpose of lump-sum (subject to CGT).
So to be clear about the myth or mistake in question, it is relying solely on property investment, without taking into account relevant taxes, and without utilising other more tax advantageous pension options before hand - am I right in that?
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